WeWork’s new Indian-origin CEO Sandeep Mathrani revives lost causes but his appointment smells of ‘growing scepticism’ inside the ranks at SoftBank, and gives insight into the plan to save the unicorn and ‘clear Adam Neumann’s mess’.
Sandeep Mathrani, the man tasked to straighten out Adam Neumann’s mess by SoftBank, was previously the Chief Executive at Brookfield Property Partners retail group, a real estate company that manages and operates retail spaces, buildings, warehouses, and offices. So, why does SoftBank want a real estate CEO for WeWork, a tech company?
Mathrani replaces Artie Minson and Sebastian Gunningham. The duo took over Neumann’s role as co-CEOs scampering to save WeWork’s credibility after a disastrous IPO. Mathrani will officially take over on February 18. His task is a monumental turnaround for what looks like a done and duster business model at WeWork.
Mathrani’s task is a monumental turnaround for what looks like a done and duster business model at WeWork.
He will report to Marcelo Claure, Chairman of the Board of Directors at SoftBank. The Japanese apex VC was forced to inject several billion dollars to save WeWork from bankruptcy and its overall investment vanishing into thin air.
Dire State Of WeWork Taylor-Made For New Indian Origin CEO
WeWork is a global sensation for its amazing, modern and groovy atmosphere work-spaces. They’ve included other services in their model like health insurance and business software. However, come exam time, WeWork utterly failed the market test. The challenges that Mathrani faces is immense. WeWork had to give up its entry into Wall Street, due to the growing mistrust of investors.
Mathrani does have the experience to overcome a company from a crisis. He single-handedly plotted the revival of General Growth Properties (a shopping mall operator) from bankruptcy in 2010. But the challenge at Neumann’s WeWork is very different and huge. Making a loosely connected global network of office spaces a profitable business and building trust in the market again.
In October 2019, SoftBank took control of WeWork, ousting Adam Neumann with a $1.7 billion severance package, and in November, it fired 2,400 employees.
In October 2019, Japanese telecommunications giant SoftBank took control of WeWork. It made Adam Neumann step aside with a severance package equivalent of approx $1.7 billion. Adam Neumann appeared on Forbes’ list of the world’s richest people, earlier last year, with a net worth of $4.1 billion. In November 2019, WeWork fired 2,400 people worldwide, almost 20% of its total workforce.
SoftBank’s New Queen To Save WeWork From Checkmate
The first coworking space leased out by WeWork was on the corner of Grand and Lafayette street in New York City. The original office is still under WeWork. In October 2019, SoftBank announced that it will own 80% of WeWork and provide billions to keep it operating. However, WeWork still struggles to bring viability to its model.
Consequently, the SoftBank’s going for the Indian-origin turnaround specialist CEO Sandeep Mathrani brings further doubt on WeWork’s financial stability. The executive movement will surely be under a scanner and up for scrutiny by the Wall Street. However, Sandeep Mathrani is a seasoned player.
Sandeep Mathrani’s executive movement raises doubts in SoftBank’s belief in the financial stability of WeWork’s model
He is known as the corporate turnaround artist who changed GGP’s fortunes coming out of the largest bankruptcy in the industry. He transformed the business with new properties the Grand Canal Shoppes in Las Vegas and Tysons Galleria in Virginia. Mathrani then sold GGP to Brookfield Partners in 2018 for $15 billion.
The Corporate Turnaround Artist Sandeep Mathrani
Born to a wealthy Indian family, Sandeep Mathrani is an Eton and Stevens Institute of Technology, New Jersey alumni. His first try-out in real estate came right after college in 1986. As a fresher, Mathrani he bought and sold a Washington DC residential apartment for a $20,000 profit after a year. He has worked for NY Real estate firms Vornado Realty Trust and Forest City Ratner. At the latter, he was mentored by NBA team Brooklyn Nets ex-owner Bruce Ratner. Ratner credits Mathrani as the man who built the firms retail biz.
As per sources, Mathrani’s primary task is to rethink and rectify Neumann’s decisions at the company. SoftBank is going old school with WeWork. Hiring a hardcore real estate guy means the VC is ready to consolidate business at WeWork. Mathrani has volumes of experience in the traditional realty market. The new CEO’s first job is to build a competitive team for himself.
Mathrani’s first task is to clear the clutter created by Adam Neumann. This might mean WeWork exiting from ventures like WeLive, WeGrow and RiseByWe.
Furthermore, media reports suggest that the company will continue to expand its core co-working space with new properties. However, at the same time, Sandeep Mathrani is expected to pull the company out of Neumann’s projects that have a dismal chance of turning profitable. That includes WeLive housing spaces; WeGrow education venture and RiseByWe luxury gyms.