The embattled coworking company WeWork is reportedly unlikely to go public this year, after a disastrous month that came to a head on Tuesday when the company replaced its CEO.
Sources familiar with the matter told The Wall Street Journal on Tuesday that the company probably wouldn’t publicly list its shares this year as planned.
WeWork filed paperwork in August for an initial public offering, kicking off a swift fall from grace in which the company once privately valued at $47 billion was said to be seeking a public valuation as low as $10 billion.
Since its IPO paperwork was released, the company’s massive losses and CEO Adam Neumann’s questionable business dealings, drug and alcohol use, and conflicts of interest have been scrutinized. WeWork made some changes, then announced earlier this month that it was delaying its IPO but still expected to list its shares by the end of the year.
Then on Tuesday, Neumann said the scrutiny had become a “significant distraction” amid WeWork’s IPO plans and announced he was stepping down as CEO in the company’s “best interest.”
The Journal report details Neumann’s final days as the head of WeWork. While some on the company’s board of directors pushed to oust Neumann, the WeWork cofounder had the support of many “as of Friday and into the weekend,” according to The Journal. But by Sunday, some of Neumann’s biggest allies on the board had reportedly told him they were pushing for his departure, echoing concerns from SoftBank, the Japanese firm that has injected billions into WeWork.
Replacing Neumann are two WeWork executives who will serve as co-CEOs, Sebastian Gunningham and Artie Minson. The Journal reported that they were considering “a few thousand” layoffs at WeWork to help cut costs ahead of an IPO. WeWork declined to comment.
According to The Journal, in an email to staff on Tuesday, the co-CEOs said they would “closely review all aspects” of the company and told employees to expect “difficult decisions ahead.”
Source: WeWork reportedly unlikely to go public this year, considering layoffs
By Paige Leskin
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