WeWork’s founder and chief executive officer has stepped down as CEO but will continue as non-executive chairman.
WeWork’s Adam Neumann said he had decided it was in the best interest of the company to step down as chief executive.
Neumann said the business was strong but that he was distracted by the intense media scrutiny directed at him.
The pressure to step down
WeWork’s Adam Neumann had been under severe pressure after the company put off its IPO. The company came under a glare of adverse publicity for various instances of questionable corporate governance. Investors also disapproved of the company’s holding structure which provided disproportionate voting power to co-founder and CEO Neumann.
Reports yesterday suggested the board of WeWork might remove him, with SoftBank Group said to be supporting the move.
Another report in the WSJ said Neumann used drugs and that he hoped to become Israeli Prime Minister.
Two co-CEOs will succeed WeWork’s Adam Neumann
Vice-chairman Sebastian Gunningham and the company’s president and chief operating officer Artie Minson will serve as co-CEOs.
“We will be taking clear actions to balance WeWork’s high growth, profitability, and unique member experience while also evaluating the optimal timing for an IPO,” they said.
Meanwhile, another report said WeWork might do away with as many as 5,000 roles in a move to cut costs and become profitable. In 2018, WeWork lost $1.6 billion on $1.8 billion in revenue.
The company will reduce Neumann’s voting shares to 3:1, down from 20:1.