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WeWork begins to renegotiate leases globally

FILE PHOTO: The WeWork logo is displayed on a screen during the company's IPO on the floor of the NYSE in New York

(Reuters) -WeWork said on Wednesday it has started a process of global engagement with landlords to renegotiate nearly all its leases, sending its shares up as much as 9% in morning trade.

The SoftBank-backed company said it sought to negotiate favorable terms with its landlords and plans to exit unfit, underperforming locations in order to reinvest in its other assets.

"We intend to remain in the majority of our buildings and markets," it said in a statement.

The company had reported a 3% drop in total physical memberships from a year earlier, citing increasing competition, macroeconomic volatility and softer demand than anticipated.

WeWork, which provides flexible workspaces by taking out long-term leases and renting them out for short durations, gained popularity before the COVID-19 pandemic made shared office spaces less appealing.

The company, which has struggled with heavy debts and poor financial performance, hired advisers for its restructuring efforts, Bloomberg News reported last month.

Last year, it had launched a series of steps to save cash, like exiting locations, cutting jobs, striking a deal to cut debt by about $1.5 billion and extending the date of some maturities.

(Reporting by Pratyush Thakur in Bengaluru; Editing by Pooja Desai)