SoftBank turns hard on Adam Neumann… or did it go soft?
Japanese telecommunications giant SoftBank is taking control of WeWork, and it is giving WeWork founder Adam Neumann the equivalent of approx $1.7 billion to sever most of his ties with the startup, according to The Wall Street Journal.
WeWork ‘Adam Neumann’ quits as CEO on 24th September, WeWork sets out a statement that announces the decision amidst scrutiny surrounding the company’s mis-managed IPO.
WeWork, that is in the business of facilitating co-sharing work places, will now be headed by Co-CEOs Artie Minson and Sebastian Gunningham.
The statement also hints at Adam Neumann taking up the role of non- executive chairman of the the parent ‘We companies’
Wework has come down from $47 Billion worth to $15 billion. WeWork had planned to go public next month.
Now they may never do so again.
Breaking News: WeWork’s CEO, Adam Neumann, is said to be stepping down, a stunning fall for an entrepreneur who oversaw one of the most valuable start-ups of the last decade https://t.co/WDSkfo6zSq— The New York Times (@nytimes) September 24, 2019
WeWork has been laying off staff aggressively and now with Adam Neumann stepping down, it does not send a good signal to the markets worldwide. Rather negative message goes out and WeWork could find itself in a spot of bother to maintain its positioning – the damage is done.
Adam Neumann’s great fall from the great heights happened post WeWork parent – We Company postponed its initial public offering last week. There has been an investor revolt over WeWork widening losses and Neumann’s solid control and grip over the company. This could never go down well with investors.
SoftBank invested in We company at a $47 Billion valuation in January this year. But Investor’s lack of confidence grew manifold seeing their IPO evaluation of as low as $10 Billion.
Soft Bank had finally managed to use their muscle to gather sufficient opposition against Neumann on tuesday board meetings and Neumann had no choice but to give in. WeWork Adam Neumann Quits!
The scruitny has been huge distraction in the recent weeks and therefore I have decided to step down as Chief Executive in the best interest of the company.Adam Neumann, Ex CEO WeWork
Furthermore in the given circumstances, WeCompany will slowdown all its expnasion plans and they will not be in a position to burn cash. As reported by Reuters, The company is contemplating laying off workforce and they are further deliberating on cuts across departments to optimise and somehow stay afloat.
While we anticipate difficult decisions ahead, eash decision and epartment will be re-built with rigrous analysis, always bearing in mind the long term interest and health of the organization.Minson and Gunningham , WeWork New Bosses
As a result of ‘WeWork Adama Neumann quits’ circumstances the outgoing CEO shares will not hold the same power and the share biceps have been cut drastically.
His share used to hold voting power as 20 and in the current scenario each of his shares will now have the same viting power as three – We Comaony common shares.
Rebekah- Adam Neumann’s wife Jobless
Furthermore, Neumann’s wife Rebekah is sheer victim of new announcements and in the collateral damage she may find herself jobless at We Company. She has been the Co-chief brand and impact officer.
She has also founded WeGrow, an elementary school set up under the umbrella of We Company. Unfortunately Wework will have no interest in pursuing ventures that do match the core WeWork brand personality.