Wework Halts New Lease Agreements

كتب - آخر تحديث - 20 ديسمبر 2020

The Financial Times reported Thursday that the company, officially known as We Company, had stopped signing new leases to control costs. The decision to suspend new leases comes as We Company plans to lay off thousands of its more than 12,000 employees, some with close ties to co-founder and former CEO Adam Neumann. “WeWork continues to sign new leases with our leasing partners,” Barron said Friday. “We expect entry into new leases to slow in the coming quarters as we grow more strategically and focus on accelerating our path to profitability.” We decided on Thursday to resume leasing. “We expect the pace of new leases to slow in the coming quarters as we will grow more strategically,” a We spokesman said on Friday. The decision to terminate all new leases comes as WeWork`s parent company – we Company – plans to lay off thousands of its more than 12,000 employees in the coming weeks. WeWork, New York`s largest tenant and one of London`s largest, has reportedly stopped all new leases with property owners. WeWork insists that it report on the termination of the new leases. Space as a service agreement, or co-working agreement, are licenses, which are separate and distinct from leases.

The co-working agreement offers the licensee greater flexibility and, legally, they are more like members of a gym or club. However, flexibility and maintaining control may have the unintended consequence that licensees have increased their responsibility to their customers. This new approach initially involved the decision not to sign new leases, as people familiar with the matter have said. These leases generally require WeWork to spend money to build the space it will rent and then sublet. WeWork`s turbulence is leading the company to end the signing of new leases with the office-sharing space, a further blow to New York`s commercial real estate market. WeWork is ending all new leases with real estate owners as the us office startup tries to cut costs, the Financial Times reported Thursday, citing people with information. WeWork did not respond to a Reuters request to comment on the report. .

On Thursday, the company also planned to cut about 20 employees with close ties to co-founder – and former chairman – Adam Neumann, including some of his senior executives, employees said. With its expansion to more than 500 offices in 111 cities, the group burned by capital and reported a loss of $1.6 billion last year on sales of $1.8 billion. We Company (PRIVATE-NA:WE), the parent company of office-sharing company WeWork, simply cannot take a break after a series of setbacks. WeWork`s Headquarters in Chelsea has been in crisis since Neumann was ousted on Tuesday after the dramatic collapse of the IPO, which was to be a highlight of a banner year for IPOs. Instead, the company is now trying to secure a vital new funding artery.