Adam Neumann is stepping down as CEO of The We Company, the parent of WeWork. He’ll remain with the office rental company as non-executive chairman, aka a pilot who doesn’t get to touch the controls.
The main instigator: Masayoshi Son, CEO of major WeWork investor SoftBank.
- Masa was gaga over Neumann as recently as this January, when he plugged $2 billion into WeWork at a $47 billion valuation.
But WeWork aged as gracefully into fall as the New York Mets
As it prepared for a monster IPO this summer, WeWork filed regulatory documents that left people who write words for a living “at a loss for words.” Convoluted financials, incomprehensible corporate governance structures, billions of dollars in losses…it’s all there.
As Masa and other investors watched WeWork slash its valuation from $47 billion to $15 billion to salvage the IPO, their collective blood pressure climbed. When WeWork delayed its public offering last week, they’d had enough.
First there was Adam, then came We
Neumann co-founded WeWork in 2010, and with the right mix of charisma, capital, and shrewdness, he turned it into one of the most valuable startups in the country.
- Don’t forget how big WeWork is. Last September, the company topped JPMorgan to become the largest tenant of office space in Manhattan.
- WeWork has over 800 locations in cities as far-flung as Xi’An, China, and Columbus, Ohio.
But unflattering media reports in recent weeks showed that Neumann’s eccentric leadership style and cozy financial relationship with the company had turned WeWork’s IPO radioactive on Wall St.
Where does WeWork go from here?
CFO Artie Minson and Vice Chairman Sebastian Gunningham will take over as co-CEOs, but don’t expect them to ring the bell at the Nasdaq this morning. Heavy job cuts could be on the horizon, and WeWork has a long way to go to resolve its governance, financial, and reputational issues.