WeWork informed parents on Friday that it will be closing its elementary school after this academic year to focus on the company's core office-rental business.
The US investment bank may contribute a large sum to any bailout, giving WeWork a much-needed infusion of cash after the once high-flying startup's failed attempt at an initial public offering (IPO), the newspaper cited unidentified people as saying. That came amid deep investor skepticism about the company's losses, murky prospects for eventual profitability, and corporate governance problems.
The stock-sale debacle posed an urgent funding problem for WeWork. "WeWork and the families of WeGrow students are engaging in discussions with interested parties regarding plans for WeGrow for the following school year".
WeWork is also in talks with longtime financial backers about new financing. At that rate, Bernstein projects WeWork could run out of cash to maintain its current plans by mid-next year.
WeWork's ousted CEO Adam Neumann has lost his billionaire status, according to Forbes. The company's annual loss widened from $429 million in 2016 to $1.6 billion at the end of past year, a period in which it raked in $1.8 billion.
WeWork leases buildings and divides them into office spaces to sublet to members, who include small businesses, start-ups and freelancers who can't afford permanent offices. It has locations in 111 cities worldwide and had planned to launch in 169 addition cities, plans that will likely now be pared down.
"Rebekah created a attractive school where kids' superpowers, happiness, love, spirituality and learning are the core", said Raj Gupta, a parent who has three children at WeGrow.
The school was part of the communal ethos that the Neumanns had promoted as the guiding principle of their company. The school is located inside WeWork's headquarters in New York's Chelsea neighborhood and students spend one day a week on a farm in Staten Island.