Office sharing company WeWork, once among the world's most valuable startups, has filed for bankruptcy.
Founded in 2010, the co-working real estate giant made the announcement Monday, calling the move a "comprehensive reorganization" of the business.
"Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet," said CEO of WeWork, David Tolley in a statement.
The company confirmed the news on their website, revealing it filed for protection under Chapter 11 of the U.S. Bankruptcy Code, and intends to file recognition proceedings in Canada under Part IV of the Companies' Creditors Arrangement Act.
"As part of today's filing, WeWork is requesting the ability to reject the leases of certain locations, which are largely non-operational and all affected members have received advanced notice," the statement continued.
Despite efforts to turn the company around since the ouster of founder and CEO Adam Neumann - including significant cuts to operating costs and rising revenue - WeWork has struggled in a commercial real estate market that has been rocked by the rising costs of borrowing money, as well as a shifting dynamic for millions of office workers now checking into their offices remotely.
In September, when the company announced plans to renegotiate nearly all of its leases, CEO David Tolley noted that the company's lease liabilities accounted for more than two-thirds of its operating expenses for the second quarter of this year - remaining "too high" and "dramatically out of step with current market conditions."
Last month, WeWork skipped hefty interest payments - kicking off a 30-day grace period before an event of default. And last week, WeWork disclosed a forbearance agreement with bondholders that extended negotiations by one week prior to triggering a default.
(The Associated Press contributed to this report.)