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.

Related Articles

  • Kim Kardashian and Kendall Jenner mocked for Emmys speech

    Kim Kardashian and Kendall Jenner mocked for Emmys speech

    Despite this, the sisters continued on with their monologue until announcing RuPaul's Drag Race as the victor of the category. Unfortunately, sources tell ET that Kylie is now sick and that is why she did not join her older sisters at the event.
    Kolbe lights up Springboks in loss to All Blacks

    Kolbe lights up Springboks in loss to All Blacks

    Perhaps it was nerves, but play was marred by many handling errors from both sides early in the contest. For the fourth time in as many matches at this World Cup, the team that scored first finished second.
    Colts move to 2-1 with win over Falcons in Indianapolis

    Colts move to 2-1 with win over Falcons in Indianapolis

    The Indianapolis Colts (2-1) defeated the Atlanta Falcons (1-2) in their home opener on Sunday, 27-24, at Lucas Oil Stadium. Hilton returned to the sideline without his helmet and gloves with about 11 minutes left in the third quarter.
  • Ukraine scandal around Trump forcing Democrats to mull impeachment

    Ukraine scandal around Trump forcing Democrats to mull impeachment

    Trump grew hostile as reporters questioned him about the matter at the meeting with Polish President Andrzej Duda. The aid was released before a likely rebuke by the Senate Appropriations Committee.
    New Mac Pro to be Texas-made after Apple escapes Trump tariffs

    New Mac Pro to be Texas-made after Apple escapes Trump tariffs

    It spent more than $60 billion previous year . "Make them in the United States of America , no Tariffs!" he tweeted in July. It's created to be paired with Apple's new $4,999 Pro Display XDR monitor, which in turn is mounted on a $999 Pro Stand.
    WeWork CEO Adam Neumann may be ousted as soon as Monday

    WeWork CEO Adam Neumann may be ousted as soon as Monday

    The We Company has faced concerns about its corporate governance standards, as well as the sustainability of its business model. But Neumann, who is one of seven board members, is We's controlling shareholder, giving him the power to fire the board.
  • Adam Sandler As You've Never Seen Him Before — Uncut Gems Trailer

    Adam Sandler As You've Never Seen Him Before — Uncut Gems Trailer

    Sandler is electric, a charming and roguish presence who spends the entire two-minute clip riding the razor's edge of ruin. Josh Safdie & Benny Safdie directed the movie from a screenplay they wrote alongside Ronald Bronstein.
    United Kingdom  believes Iran was behind Saudi oil attacks: PM Johnson

    United Kingdom believes Iran was behind Saudi oil attacks: PM Johnson

    For its part, Iran denies being responsible and has warned any retaliatory attack targeting it will result in an "all-out war". He says he's not planning to hold talks with Iran's leader who will also be in NY for the summit.
    Dozens Arrested in Tense 'Yellow Vest' March in Paris

    Dozens Arrested in Tense 'Yellow Vest' March in Paris

    Saturday's protests interfered with France's annual Heritage Day, when well-known sites open their doors to the public. A demonstrator faces police officers on the Champs Elysees in Paris , France, Sept. 21, 2019.
  • Relentless Liverpool rolls on with victory at Chelsea

    Relentless Liverpool rolls on with victory at Chelsea

    Liverpool manager Jurgen Klopp revealed how Liverpool's set-piece display in the win against Chelsea was down to Peter Krawietz. Moreover, first-half injuries that forced Emerson Palmieri and Andreas Christensen to hobble off will not help matters.
    Miley Cyrus And Kaitlynn Carter Seem To Have Split

    Miley Cyrus And Kaitlynn Carter Seem To Have Split

    She wrote: "I am proud to say, I am simply in a different place from where I was when I was younger". Miley doesn't want a serious relationship. "Miley and Kaitlynn broke up", the source said .
    Trump says he is looking for a

    Trump says he is looking for a "complete" trade deal with China

    We're searching for the big thing. "That's what we're working to achieve", Morrison said. According to the president, the two countries were very close to having a trade deal.