WeWork is reportedly in talks with SoftBank about a $1 billion lifeline

Getty

WeWork cofounder Adam Neumann stepped down as CEO this week after the shared workspace group scrapped its IPO.

• WeWork is in talks with SoftBank about a $1 billion lifeline after shelving its IPO this month, according to the Financial Times.
• SoftBank, which has plowed more than $9 billion into the shared workspace group, is considering investing the extra funds on top of $1.5 billion it has already committed.
• WeWork shelved its IPO this month after investors balked at its business model, mounting losses, and controversial CEO and cofounder Adam Neumann.
• New co-CEOs Artie Minson and Sebastian Gunningham, who took the reins from Neumann this week, have considered firing thousands of the group's 12,500 employees, the Financial Times reported.
• Read all of BI's WeWork coverage here.

WeWork is in talks with SoftBank about a $1 billion lifeline after shelving its IPO this month, according to the Financial Times.

SoftBank, a Japanese conglomerate that has plowed more than $9 billion into the shared workspace group, is considering investing the extra funds on top of $1.5 billion it has already committed. In return it would pay less per share, giving it a larger stake in WeWork, the Financial Times reported, citing people briefed on the matter.

WeWork shelved its IPO this month after investors balked at its business model, mounting losses, and controversial CEO and cofounder Adam Neumann. The lack of interest meant it was looking at a public valuation below $20 billion - well short of its last private valuation of $47 billion. It also risked raising less than $3 billion, the amount needed to unlock $6 billion in bank loans.

Another $1 billion from SoftBank could open up fresh financing options for WeWork, the Financial Times said. The company is scrambling to secure funds given it might not complete an IPO this year - a condition of the bank financing. Without the $6 billion in bank loans, and assuming it maintains its previous cash-burn rate, it could run out of cash in just 13 months, FT Alphaville estimated.

Given its uncertain financial position, WeWork may be looking to cut costs.

New co-CEOs Artie Minson and Sebastian Gunningham, who took the reins from Neumann this week, have considered firing thousands of WeWork's 12,500 employees, the Financial Times reported. They've also explored shutting peripheral businesses such as Managed by Q, an office maintenance platform, the newspaper said.