WeWork officially filed for bankruptcy this week, a seemingly inevitable development for the coworking startup that once promised to revolutionize office work but has been slowly unraveling for years.
Co-founder Adam Neumann’s well-documented excesses during WeWork’s early days have already inspired a best-selling book and a star-studded miniseries. Endlessly charismatic, Neumann sold his vision of building community and breaking old-school office culture to investors, who poured billions into his mission to “raise the consciousness of the world,” as he often put it. The startup set up the wave of the venture capital-backed free money era and saw its valuation peak at about $47 billion before it all came crashing down.
Neumann was eventually ousted in 2019, but he left with a multimillion-dollar golden parachute and is now reportedly working on financing a new pseudo-real estate startup.
But other people were seriously affected by the company’s collapse. Legendary SoftBank investor Masayoshi Son wasted billions trying to prop up WeWork, while suffering untold damage to his reputation. And many of WeWork’s early employees, who worked at lower salaries because they were offered stock options, ended up with nothing.
Kelly Sullivan/Getty Images for the WeWork Creator Awards
Adam Neumann, founder of WeWork, speaks onstage at the WeWork San Francisco Creator Awards at the Palace of Fine Arts on May 10, 2018 in San Francisco, California.
Over the years, the American tech sector has been built on many myths, including the idea that founders are visionary geniuses who can foresee key trends years in advance. The wild rise and fall of WeWork is the latest high-profile incident to shatter that myth.
Here’s a look at four of the wildest moments in WeWork’s rise, according to company statements and a best-seller about the company.
Neumann had a penchant for marijuana, many former colleagues have said, and seemed to especially enjoy using marijuana while traveling on private planes.
In the summer of 2019, Neumann and his friends smoked marijuana while crossing the Atlantic Ocean in a Gulfstream G650 private jet en route to Israel. After the group landed, the flight crew apparently found “a sizable piece of drugs stuffed into a cereal box for the return flight,” the Wall Street Journal reported, citing people familiar with the incident. The plane’s owner recalled the plane due to this find, concerned about the consequences of cross-border transportation of marijuana, leaving Neumann to find his own transportation back to New York.
Neumann and his inner circle also left private planes covered in vomit, journalists Eliot Brown and Maureen Farrell wrote in their chronicle of the company, “The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion.” In one case, when Neumann was flying on a private jet, the marijuana smoke was so thick that cabin crew members working on the plane had to don oxygen masks, according to the book.
Mixing layoffs and tequila
Neumann also liked tequila and saw no problem in drinking it in the office. (Part of WeWork’s push to appeal to millennials included free-flow beer and open bars set up inside its coworking booths.)
But sometimes alcohol and parties were mixed with work in an unthinking way. One report said that just weeks after Neumann laid off about 7% of his staff in 2016, he addressed cost-cutting efforts during a somber all-hands meeting, saying it was difficult but necessary and the company would be better for it. . Then, however, he had employees come into the room with trays of plastic cups filled with tequila and shortly after that he had Darryl McDaniels of the hip-hop group Run-DMC come out and play for the staff, as some were still They were digesting the news.
A fired WeWork employee carries a bag as he leaves WeWork’s corporate headquarters in Manhattan, New York, on November 21, 2019.
WeGrow, WeLive and other aggressive side projects
At one point, WeWork also decided to reinvent children’s education and the real estate market.
The company opened an elementary school for children from preschool to fourth grade in the fall of 2018. The school, called “WeGrow,” was headed by Adam Neumann’s wife, Rebekah, and had the mission to “unleash the superpowers of every being.” human”. the company stated. The school’s tuition started at $36,000. In addition to the traditional curriculum, the children were also taught yoga, meditation, and agriculture.
WeWork also launched a co-living experiment in New York City called “WeLive,” which He rented what were essentially modern dormitories with many amenities for young professionals.
Caitlin Ochs/Bloomberg/Getty Images
An alcove bed is seen next to the dining room in an occupied unit in the WeLive building in New York, U.S., on Tuesday, October 31, 2017.
The company eventually closed the school and disassociated itself from its real estate projects.
The beginning of the end perhaps dates back to WeWork’s first attempt to go public in 2019.
The company filed its S-1 form (essentially a registration form for companies seeking to go public) in August 2019. Six weeks after the filing, Neuman was removed as CEO.
The inner workings of the then-private company were revealed in that S-1 form. In addition to exposing larger-than-expected losses and raising major questions about WeWork’s path to profitability, the filing also brought to light some of the now-egregious potential conflicts of interest with Neumann’s management. (Neumann could argue that he acted as CEO and that everything he did was revealed to and approved by the board of directors.)
Adam Neumann, center, co-founder and CEO of WeWork, attends the Nasdaq opening ceremony, Tuesday, Jan. 16, 2018, in New York.
Perhaps one of the most glaring examples of this in the form was the revelation that Neumann and his founding partner registered a trademark on the use of the “we” family trademarks and then came back and charged the company almost $6 million. for commercial use of as part of its rebranding, although Neumann later changed his mind on the matter.
The post-Neumann era and the pandemic
In a statement earlier this week, Neumann called the news of WeWork’s bankruptcy “disappointing.” But he expressed hope for the company’s future even after bankruptcy. “I believe that, with the right strategy and team, a reorganization will allow WeWork to emerge successfully,” he said in a statement.
Tolga Akmen/AFP/Getty Images
A person works in a co-working space near signs advising people to maintain social distancing at WeWork, a coworking and office space in the City of London, on April 13, 2021, as the company improves health standards and safety in response to COVID-19.
But even after Neumann’s departure, WeWork has found it difficult to change course.
One of the main reasons for this is that the Covid-19 pandemic emerged just months after Neumann was ousted from the company, dealing a new unexpected blow to WeWork’s core business of bringing people together in coworking spaces.
And even years into the pandemic, many office workers have become accustomed to remote work and resist being asked to come into the office, leaving a glut of empty offices in major American cities.
Clarification: This story has been updated with more context surrounding Neumann’s potential conflicts of interest revealed in the S-1 filing.