Inside WeWork’s Toxic Phone Booths

WeWork first learned there might be something wrong with its phone booths early this summer, when UBS Group AG complained about the smell. The investment bank was the biggest customer of WeWork’s corporate interior design business, which outfitted UBS’s workspace last year with trendy furniture, curtains of plants and juice bars. The phone booths, which offered privacy in the open-plan design, were a centerpiece, because they were wholly designed by WeWork in-house.

To manufacture the tall, sound-insulated booths, which sport rectangular windows and folding doors, WeWork chose Premier XD, a now-shuttered commercial fixture company that built kiosks for the likes of Starbucks, according to three people familiar with the matter and a document reviewed by Bloomberg Businessweek that includes detailed sketches of the manufacturing plan. After UBS employees at the offices of its wealth management unit in Weehawken, N.J., noted the unusual smell, the bank hired a company to test the Premier-made booths. The results showed elevated levels of formaldehyde, and UBS had the booths replaced, say two people familiar with the matter who asked not to be identified because they weren’t authorized to discuss the details publicly.