WeWork is an American commercial real estate company that offers shared work areas typically for tech startups, as well as services for other businesses. The company has been attempting to uncover a financial solution to its problems after aspirations for an IPO was dropped last month. After its unsuccessful introduction to the stock market, co-founder Adam Neumann stepped down from his position as Chief Executive Officer.
Now, WeWork is facing another challenge that could prove to cost even more. The company was forced to shut down roughly 2,300 phone booths at many of its locations in the United States and Canada, as high amounts of formaldehyde were detected.
According to an email that the company sent to its tenants yesterday, long periods of exposure to formaldehyde is known to cause cancer. After one tenant spoke out about eye irritation and an unpleasant smell, WeWork began initiating tests. The findings led to the removal of 1,600 phone booths, and another 700 have been shut down as tests continue. Every one of the booths that have been closed were recently established this year.
“The safety and well-being of our members is our top priority and we are working to remedy this situation as quickly as possible,” stated WeWork.
Analysts say that WeWork’s cash flow is rapidly dwindling, making this debacle an extremely unwelcome event for the company. Besides the undisclosed costs of testing and replacing the phone booths, the company could end up facing several lawsuits.
A cancer-causing chemical
In the email to the tenants, WeWork said, “Long-term exposure to formaldehyde, such as that experienced by workers in jobs who experience high concentrations over many years, has been associated with certain types of cancers”.
Over 30 years ago, the United States Environmental Protection Agency categorized formaldehyde as a probable human carcinogen when encountered frequently or for extended durations.
One unnamed tenant expressed her concern regarding the risk of cancer, as she had experienced many hours in the phone booths at a WeWork in San Francisco that was reported to contain elevated levels of formaldehyde.