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WeWork’s Neumann Stepping Down as CEO
Adam Neumann is stepping down as CEO of WeWork while remaining non-executive chairman, the company confirmed Tuesday. The news was first reported earlier Tuesday by the Wall Street Journal.
Sebastian Gunningham, formerly vice chairman, and former CFO Artie Minson will become interim co-CEOs, WeWork said. The changes are effective immediately.
“As co-founder of WeWork, I am so proud of this team and the incredible company that we have built over the last decade,” Neumann said in a statement. “Our global platform now spans 111 cities in 29 countries, serving more than 527,000 members each day. While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive.”
Neumann remains WeWork’s largest individual shareholder with about 115 million shares. His leadership of the co-working giant came under fire recently, as the company prepared for its initial public offering and investors questioned its finances and corporate governance.
Masayoshi Son, chairman of SoftfBank, WeWork’s largest investor, led the push to remove Neumann as CEO, CNBC reported. Son reportedly was frustrated with Neumann’s tendency to brush off advice on matters that included going ahead with an IPO. Last week, the company postponed the IPO but said in a statement that it still planned to hold one by the end of 2019.
CNBC reported that WeWork executives have met with bankers to discuss cost reduction measures. These potentially could include layoffs of up to one-third of the company’s workers, or about 5,000 employees, along with closing ancillary businesses such as its private grade school and computer programming school.
With approximately a one-third share of the 71-million-square foot flex office market in the U.S., WeWork is the sector’s largest player nationally by square footage. In Manhattan alone, WeWork controls 7.2 million square feet, or four times as much as it does in second-ranked Los Angeles, according to CBRE.
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- ◦People
