WeWork Is Closing Its Manhattan School Amid Cash Crunch
(Bloomberg) -- 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.
Parent company We Co. is shedding assets and bracing for thousands of job cuts because it’s quickly running out of money. WeWork had been counting on a $6 billion loan, contingent on a successful IPO, to meet its cash needs. But that plan unraveled amid questions about its future profitability. The company’s new co-chief executive officers have been moving to slash costs and spin off businesses in an effort to slow its cash bleed. WeWork is in talks now with lenders about a $5 billion debt package, people familiar with the matter said Friday.
The small private school in Manhattan had been said to be among businesses on the chopping block, one of a series of shake-ups at the co-working company after it withdrew its IPO plans and ousted founder and former CEO Adam Neumann last month. WeGrow was founded by Neumann’s wife Rebekah, who left her position as chief brand and impact officer at WeWork in September.
“WeWork will continue to operate WeGrow through the remainder of the 2019-2020 school year, providing a quality education and classroom experience for all students,” the company said in a statement. “WeWork and the families of WeGrow students are engaging in discussions with interested parties regarding plans for WeGrow for the following school year.”
HuffPost reported earlier on the school’s closing.
WeWork Is in Talks for $5 Billion Debt Package With Lenders
WeGrow, where tuition was listed at as much as $48,000 for the 2020-2021 school year, focuses on “elevating the collective consciousness of the world by expanding happiness and unleashing every human’s superpowers,” according to the school’s website.
“Rebekah created a beautiful 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 has about 100 students, many of whom are the children of WeWork employees, including the Neumanns’ five kids. More than half of students receive financial aid.
WeGrow’s curriculum currently includes mentoring from members of the “WeWork Community.” 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.
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