As it winds through bankruptcy, 2U is looking to shed leases — and with them, rent — for office space that it no longer needs.
The company filed a motion Thursday to exit a property in Lanham, Maryland, where its headquarters is located, as well as properties in Brooklyn, New York; Chapel Hill, North Carolina; Boca Raton, Florida; Los Angeles and Boston. The lease exits will require court approval.
The leases signal how 2U’s operations and financial prospects have changed in the years since the COVID-19 pandemic began.
As 2U explained in the motion, the company — which works with colleges to build and maintain online programs and owns the MOOC platform edX — has already pulled operations from most of its office space. It tied this to the rise of remote work after the pandemic started and the company’s decreased need for office space.
2U also pegged its diminished space requirements to the downturn in its business, with demand for its online program management services falling in recent years. Since 2022, the company has undergone multiple rounds of layoffs.
In light of those financial issues, 2U said it’s prudent to shed its “onerous lease and sublease obligations,” per the motion.
Prior to filing, the company tried to negotiate “mutually beneficial” lease exits with some of its landlords, according to 2U. But it said “most” of those negotiations were unsuccessful, and so it aims to use the Chapter 11 process to shed those leases — a common feature of many bankruptcy cases.
The company filed for Chapter 11 bankruptcy protection Thursday after struggling in recent years with a heavy debt load and falling revenue. It plans to cut its debt by more than half while in Chapter 11 and to complete the restructuring process by September.