The High Altitude Water Cherenkov (HAWC) gamma-ray observatory consists of 300 water Cherenkov detectors and has been fully operational since March 2015 in central Mexico. It detects cosmic- and gamma-ray showers in the TeV energy range. For multi-TeV energies, the shower reconstruction and hence the performance of the detector is affected by the partial containment of the showers within the array. To improve the sensitivity at the highest energies, HAWC is being upgraded with an outrigger array. It consists of 350 comparably much smaller water Cherenkov detectors, sparsely distributed around the HAWC main array. It will increase the instrumented
area by a factor of 4-5. In this contribution, we will present the current status of the upgrade as well as simulation results on anticipated improvements in the performance of the observatory.