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WeWork, the formerly high-flying shared office space company that was once among the world’s most valuable startups, filed for bankruptcy on Monday after years of deteriorating financial performance. 

“To successfully achieve its goals, WeWork Inc. and certain of its entities filed for protection under Chapter 11 of the U.S. Bankruptcy Code, and intend to file recognition proceedings in Canada under Part IV of the Companies’ Creditors Arrangement Act (the “CCAA Recognition Proceedings”),” the company said in a statement. “WeWork’s locations outside of the U.S. and Canada are not part of this process. WeWork’s franchisees around the world are similarly not affected by these proceedings.”

WeWork’s collapse caps a startling decline for a company that was valued at $47 billion in early 2019 after a torrent of venture capital funding from Japan’s Softbank, Goldman Sachs, BlackRock and other blue-chip investors. Over time, its operating expenses soared and the company relied on repeated cash infusions from private investors.

WeWork leases buildings and divides them into office spaces to sublet to its members, which include small businesses, startups and freelancers who want to avoid paying for permanent office space. The company began struggling right out the gate, however, because millions of Americans converted to remote work and no longer needed office space when mandatory COVID lockdowns were in place.

WeWork said in its statement announcing the bankruptcy filing that its office spaces are still “open and operational.” The company said it is “requesting the ability to reject the leases of certain locations, which are largely non-operational, adding that “all affected members have received advanced notice.”

In August, WeWork warned that it might not be able to survive over the next year because of factors such as financial losses and a need for cash. The company also said that it’s facing high turnover rates by members. 

Former WeWork founder and CEO Adam Neumann launched the company in April 2011. He was ousted in September 2019. 

“As the co-founder of WeWork who spent a decade building the business with an amazing team of mission-driven people, the company’s anticipated bankruptcy filing is disappointing,” Neumann said Monday in a statement. “It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before. I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully.”

WeWork’s downturn began in late 2019 when the company planned to go public but backed out after the company revealed that its losses were much bigger than projected. The company laid off 2,400 employees, or nearly 20% of its workforce, in November 2019. WeWork eventually sold shares to the public in 2021.

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