WeWork CEO Adam Neumann is stepping aside amid questions about the company’s finances and his personal antics.
“While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive.”
The New York-based company, which runs trendy communal office spaces, said Neumann will remain on its board as non-executive chairman. WeWork’s Artie Minson, formerly co-president and chief financial officer, and Sebastian Gunningham, formerly vice chairman, will become joint CEOs of the company.
Neumann co-founded WeWork in 2010 with one shared office in Manhattan. It now operates in 111 cities worldwide and serves 527,000 members.
Skepticism about WeWork’s business model mounted after the company delayed a planned initial public offering earlier this month. WeWork’s revenue has risen sharply, reaching $1.8 billion in 2018. But its losses have mounted almost as quickly, reaching $1.6 billion last year.
But it is Neumann who has been the face of the company and carries baggage with him. He created a stir by using some of his WeWork stock to secure a $500 million personal loan prior to the company’s planned initial public offering. He also drew criticism after The We Company — the recently renamed parent of WeWork — paid him nearly $6 million for the trademark “We.” He returned the money following the backlash.
Neumann further raised conflict of interest concerns because he owns four buildings that WeWork leases.
“While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive,” Neumann said in a statement.
In a joint statement, Minson and Gunningham said they are evaluating the optimal timing for an IPO.
“Our core business is strong and we will be taking clear actions to balance WeWork’s high growth, profitability and unique member experience,” they said.
© The Associated Press. All rights reserved.