WeWork co-founder Adam Neumann has stepped down as CEO effective immediately, the company announced Tuesday.
The company named as co-CEOs Chief Financial Officer Artie Minson and former vice chairman Sebastian Gunningham.
"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 today after graciously entering Low Earth Orbit to deliver to the human race his departing message.
Neumann, whose net worth is pegged by Forbes at $2.2-billion, developed a cult following among many We Company employees, vowing to "elevate the world's consciousness" as he sought to establish WeWork as a brand that transcended office sharing.
The We Co. directors Neumann believes oppose him are Ronald Fisher, a Softbank vice chair; Bruce Dunlevie of venture firm Benchmark, and Mark Schwartz, formerly of Goldman Sachs, sources said.
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Calls for Neumann to step down are being led by Japanese investment giant SoftBank, which bought shares of We Co.at a $47 billion valuation earlier this year - only to learn that the company would be valued at under $20 billion in an IPO.
Neumann has also agreed to further reduce his sway over corporate decision, said the people, who asked not to be identified because the details were private. But there was little sign that IPO investor sentiment would change, threatening the value of the stakes, not just of outside investors in the company, but of Neumann as well.
"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", he said.
Gunningham and Minson said they "anticipate hard decisions ahead" to protect the company's "long-term interests and health", they wrote in an email to staff reviewed by Bloomberg.
WeWork has shaken up the sleepy world of office rentals by leasing space, giving them a millennial make-over with potted plants, communal areas and beer taps and then leasing them to start-ups and other would be entrepreneurs. Over the last month, We worked to address some of those issues, but the company's unusual governance and concerns about its resiliency in an economic downturn were still a red flag to some investors. Neumann will stay on the board as non-executive chairman, the company added. Now, its IPO is on ice - it was originally supposed to go public this month, but is now said to be aiming for the end of the year.
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He also invested in properties that leased space to WeWork.
Neumann alone had taken nearly $1 billion in personal loans and credit lines from WeWork and its lenders.
Neumann started the company in 2010 with University of OR graduate Miguel McKelvey.
We has burned through more than $2bn in 2018 and on current projections could run out of cash sometime next year if its fortunes do not turn or it fails to raise more money. In 2017, under pressure from investors, Travis Kalanick resigned as chief executive of Uber.
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