WeWork Faces Massive Layoffs as CEO Neumann Steps Down
WeWork braces for significant layoffs after co-founder Adam Neumann steps down as CEO and relinquishes his supervoting power. The dramatic leadership change leaves the struggling startup and its major investor, SoftBank, facing massive financial losses.
WeWork faces massive layoffs after co-founder Adam Neumann steps down as CEO under heavy pressure and transitions to the role of non-executive chairman. Executives and bankers discuss cutting up to 5,000 employees, which accounts for a third of the workforce, while some sources speculate that up to half of the 15,000-person staff eventually face termination to reduce the unprofitable company's expenses.
Neumann loses significant control over the company he founded nine years ago by agreeing to reduce his supervoting shares from 20 votes per share to just three. His wife, Rebekah Neumann, also leaves the business entirely, marking a breathtakingly fast removal of the couple from their leadership positions following a highly criticized IPO prospectus.
The Japanese conglomerate SoftBank stands to lose billions of dollars on its massive investments in the company and potentially writes down nearly its entire stake. Insiders point to SoftBank's influx of billions of dollars roughly two years ago as the catalyst for an unrestrained culture that ultimately causes the company's public market prospects to unravel.