WeWork, the trendy and uber-millennial coworking company, has been in headlines lately because of its massively disappointing earnings, but now its co-founder and CEO Adam Neumann has gotten his own personal taste of the bad press, leading him to step down as CEO.
The Wall Street Journal did a profile piece on the eccentric CEO, and people did not like what they read. Smuggling weed overseas in a cereal box is just the beginning. WSJ also revealed his problematic practices in the workplace.
The profile alleges that he one time fired 7% of his staff, only to, immediately following this, pass out tequila shots to the remaining staff and treat them to a private Run DMC concert. First of all, so random, and second, the absolute wrong time to celebrate. His wife also apparently had a short meeting with several employees and promptly decided to fire them all just because she didn’t “like their energy.”
Suddenly, WeWork’s problems are starting to make sense. It sounds like Neumann is just flying by the seat of his pants, doing whatever feels right in the moment. These effects have been highly noted in reports of WeWork’s performance. Though the company makes a relatively large amount of money, they are spending way more. For example, they made about $1.9 billion during the first six months of this year, but they reported a net loss of $690 million, and the losses are just getting greater. They have been dubbed the “most ridiculous IPO of 2019.”
Neumann made a public announcement, saying that though the company is widely successful (but is it though…?), “the scrutiny directed towards [him] has become a significant distraction” and therefore he is stepping down as CEO. He will continue as a non-executive chairman at the parent company, The We Company, but will not have direct involvement in his current role.
We will see how WeWork will progress after his resignation. It’s hard to believe that his seemingly negative contributions to the workplace atmosphere are the sole reasons that they are struggling to survive, but it is worth monitoring if there will be positive changes going forward, or if they will crash and burn for real.
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Hannah Michelle Lambert is the Social Media + Events Coordinator at Worthix, as well as the host of the monthly CX News Recap segment. She is a graduate of the University of Michigan.