Founded in 2010 by Adam Nuemann and Miguel McKelvey, WeWork was an innovative and exciting business model which pledged to “change the world” through providing shared workspaces and offices for start-ups, freelancers and a now a growing number of multinational corporations. CEO, Adam Neumann claimed what separated WeWork from their key rivals within the co-working industry such as Regus and Servcorp, was that WeWork reached out to the so-called “We Generation” – a millennial workforce who demanded more than just a workplace dedicated for working related activities. WeWork soon began to gain traction within the co-working market after landing contracts with notable start-ups such as Reddit, New York Tech and HackHands. Huge investments from illustrious donors such as J.P Morgan and Goldman Sachs soon followed, however the crucial capital investment came in 2017 after CEO of Japanese multinational SoftBank, Masayoshi Son injected $3billion into WeWork and an additional $1.4billion into new WeWork companies including WeWork Pacific. This colossal investment reportedly came after an astonishing 12-minute negotiation between the two CEOs which helped send WeWork’s valuation up to a staggering $47billion.

So, the question here is, how did such a prosperous and pioneering organisation crumble to its knees? The first signs of WeWork’s wobble came in January 2019 when they rebranded themselves ‘The We Company’ and sought further investment from SoftBank to facilitate a further expansion into new areas including schooling. Needing to raise additional funds for this expansion, WeWork confidentially filed for an IPO which consequently exposed their wretched financial shape to the world. With many investors questioning how WeWork had fallen into such a weak financial position, investigations were conducted which found Nuemann had been buying properties and leasing them back to WeWork and that he had even trademarked the word ‘We’ and charged WeWork’s $6billion for its use. This scandal provoked WeWork’s valuation to plummet from $47billion in January to $10 billion in September. Desperately attempting restore WeWork’s prosperity, SoftBank convinced Nuemann to step down from his position as CEO in late September, although a $1.7billion buyout package remains open to him. Since Nuemann’s departure as CEO, WeWork have postponed their IPO application and just earlier this month SoftBank have announced thousands of job cuts worldwide as part of a restructuring programme. What the future holds for WeWork is unclear but what certainly doesn’t lack clarity is Adam Nuemann’s culpability for the demolition of this once budding enterprise.

Oliver Watt

The Demise of WeWork