The opening to WeWork’s IPO prospectus included a lofty dedication to “the energy of We.” Notably absent were any mentions of formaldehyde, which, according to Business Insider, is present in massive levels in over 1,600 WeWork phone booths.
For those working from WeWork’s pricey open-plan office spaces, phone booths offer a rare oasis of tranquility, where thoughts can exist unbroken from the hum of phones and clattering keyboards. The problem is, some people who used them ended up complaining of noxious odors and eye irritation.
WeWork investigated and ultimately withdrew 1,600 of the booths that were found to have high levels of formaldehyde. It’s currently investigating a further 700 booths for the chemical. WeWork blames the presence of the chemical on the manufacturer of the booths.
Formaldehyde is a versatile chemical used across many industries. It’s commonly used as a sealing agent during the manufacturing of wood products, like sound-proof phone booths. The problem is that at high enough levels, it’s extremely toxic, and can cause eye, nose, and throat irritation.
Compounding the issue is the fact that formaldehyde is also a common allergen. A study of nearly 4,500 patients between 2005 and 2006 found nearly nine percent of people have some kind of allergy to it.
Needless to say, this is exactly the type of chemical you don’t want to be in a confined space with.
The news is embarrassing, especially considering what’s been a challenging period for WeWork. In September, it was forced to bail on its long-anticipated IPO after scrutiny of its finances showed the company was hemorrhaging money at an unsustainable rate. This resulted in the company’s CEO, Adam Neumann, resigning and the appointment of two new co-CEOs.
Despite that, the company continues to burn cash at a seemingly-unstoppable pace and is currently on the hunt for a new line of credit. Without it WeWork may run out of cash, which would only amplify its current turmoil.