NeedWork: WeWork Expands Executive Purge Of Neumann Allies
The management purge that began with the firing of former We Company CEO Adam Neumann has gone international, Bloomberg reports.
WeWork has named a new head for its Japanese operations, replacing Chris Hill, who led Japanese operations for the company since it entered the market in 2017. Hill also served as ‘chief product officer’ at WeWork’s parent, the We Company, and has long been seen as a close ally of Neumann’s. He will be replaced by Kazuyuki Sasaki, a former managing director at WeWork Japan.
The management turnover comes as landlords cool to the idea of renting to the company, which could run out of money as soon as next year without the capital infusion that its now-cancelled IPO was supposed to provide. Earlier this week, BBG reported that WeWork had pulled out of a deal to rent office space at Central Quay, an office block in Dublin’s docklands neighborhood.
Hill is one of several executives who are leaving the company now that Neumann has stepped down from the CEO role (he’s still chairman of the board). Neumann stepped aside in a desperate attempt to assuage investors’ concerns about WeWork’s governance, though the company abandoned its IPO anyway. Hill had a family connection: He’s Neumann’s brother-in-law.
WeWork hasn’t broken down revenues by region, but Japan is one of the company’s most important markets, if only because it’s the home of the company’s biggest investor: SoftBank, the Japanese telecoms giant with a VC arm attached. SoftBank and its Vision Fund have together poured nearly $11 billion into the We Company (the firm was also reportedly behind WeWork’s decision to abandon its IPO and its CEO).
SoftBank also reportedly put up another $500 million for a 50% stake for the Japanese joint venture with WeWork. Using that money, WeWork Japan expanded into 21 locations across five cities in just 20 months (the firm is also reportedly designing SoftBank’s new headquarters on the waterfront in Tokyo).
Per BBG, the management purge has also claimed several other members of Neumann’s inner circle: including Michael Gross and Wendy Silverstein, the company’s vice chairman and co-head of its real estate investment arm, respectively. Neumann’s wife, Rebekah Paltrow Neumann, also departed the company after a stint as its “chief brand” and “chief impact” officer.
In a separate report, BBG revealed that WeWork is trying to repair its hard-partying reputation by toning down the launch party for its new European headquarters in London’s Waterloo district, where the company is preparing to open what it has billed as “the largest co-working space in the world.”
The launch ‘event’ will include food and drinks and run for ‘a couple of hours’ said one of BBG‘s sources, unlike previous WeWork parties, which sometimes continued late into the night, with copious amounts of drugs consumed.
Wed, 10/02/2019 – 22:35