Embattled WeWork CEO Adam Neumann stepping down

Embattled WeWork CEO Adam Neumann stepping down

WeWork co-founder Adam Neumann agreed on Tuesday to resign as chief executive and give up majority voting control, after SoftBank Group Corp and other shareholders turned on him over a plunge in the US office-sharing start-up's estimated valuation.

WeWork - whose official name is We Co. - intends to push ahead with the IPO, but some people briefed on the deliberations said it's unlikely to take place next month as planned.

The company took the drastic step of mulling slashing its IPO valuation to as low as $10 billion, according to media reports - well below the private valuation of $47 billion it secured in January.

Of course, Neumann has the power through his super majority shares to fire the board, but going nuclear would only reinforce his reputation as an imperial CEO and hurt the stock offering, sources added.

Neumann's husband and cofounder, Adam Neumann, announced his intention to step down as WeWork's CEO on Tuesday following an increasingly strong response to his actions as CEO of the company across the past several years.

He's stepping down because of the recent scrutiny of his leadership over the past few weeks, he said, which has been "a significant distraction". "Thank you to my colleagues, our members, our landlord partners, and our investors for continuing to believe in this great business". But even that move and his role change may not assuage concerns about the company, which lost more than $1bn previous year.

WeWork provides freelancers, startups and others with rentable office space they can access through an app and site.

Neumann may be the classic example of the charismatic evangelist CEO who is the wrong fit for a company entering its second act. The company also needs to raise $3 billion in a public offering in order to unlock a $6 billion bank financing package.

The board of directors today confirmed rampant speculation that Neumann, who started the global-spanning office subletting shop in 2010 with Miguel McKelvey, was about be kicked out of the top job.

Neumann, known for his party-animal lifestyle and dreams of becoming the immortal trillionaire president of the world, will stay on as non-executive chairman of the board.

These changes did little to address concerns about the business model for We Company, which rents out workspace to clients under short-term contracts, even though it pays rent under long-term leases.

WeWork's revenue has risen sharply, reaching $1.8billion in 2018. The company's financial crisis continues to rage, with reports indicated that a massive round of layoffs, as much as 5,000 people or one-third of the total workforce, will be rolled out later today in the shadow of Neumann's resignation.

His departure would be the most high-profile ousting of a tech entrepreneur since Uber sidelined founder Travis Kalanick in 2017 after a series of scandals at the ride-sharing company.

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