WeWork is closing its co-working office at 260 Queen St in the Brisbane CBD

Embattled co-working space giant WeWork will close an office in Brisbane, its third in Australia in October as it seeks to cut costs as questions mount over its future.

WeWork's office at 260 Queen St in the heart of the Brisbane CBD Golden Triang

Embattled co-working space giant WeWork will close its third location in Australia — with further closures not ruled out — as part of a push to renegotiate office leases across its global operations and “right its cost structure”.

The company confirmed it will close its Brisbane CBD office at 260 Queen St in Post Office Square, and was “working with members to relocate them to another location”.

In 2019 WeWork’s signed a 12-year lease over four floors in tower in Brisbane’s Golden Triangle which was bought last year by billionaire coal baron Sam Chong for $135m.

Industry sources say WeWork, which currently has 15 locations in Brisbane, Sydney, Melbourne and Perth, was “was a work in progress” and there may be more closures to come over the next week.

WeWork's office at 260 Queen St in the heart of the Brisbane CBD Golden Triangle.

The closure comes as the company said it will stop operating at 50 Miller St and 66 King St in Sydney. Five years ago WeWork committed to a 12-year lease on 4100sq m at the 50 Miller St building and in 2020 took out up to 6000sq m as an anchor tenant in the heritage-listed 66 King St CBD building.

The company said it has kicked off lease renegotiations on its properties and appointed Hilco Real Estate to manage the process which was crucial in building a sustainable capital structure and profitable business.

“This effort will include conversations with landlords across our global portfolio to amend lease terms, exit unfit and underperforming locations, and meaningfully invest in our strongest assets and member experience,” a spokesman said.

“In some cases, we are also looking to pursue revenue-sharing and management agreements that create value for WeWork, our members, and our landlords.

“We intend to remain in the majority of our buildings, and we also intend to keep our presence in most markets, but we are taking this as a serious opportunity to right our cost structure and align it with the current market.”

WeWork has been hurt by the pandemic inspired working from home trend putting pressure on its model – leasing small flexible and short-term spaces on sites which it has long-term contracts.

In August the company warned there was “substantial doubt” about its ability to stay in business over the next year because of its financial losses and its need for cash, among other factors.

At the time it said that its ability to stay in operation is contingent upon improving its liquidity and profitability over the next 12 months.

Headquartered in the US WeWork Inc which had 777 locations worldwide in June it was valued at $US47bn 2019. It listed on the New York Stock Exchange in 2021 and is now has a market cap of just over $US100m.

Its share price has fallen from $US520 two years ago to just under $US2.

The WeWork spokesman said they were taking a comprehensive approach to address its rental costs.

“We believe we can create a profitable business with a healthy balance sheet so that we can continue to support members’ evolving workplace needs and demand for flexibility,” he said.