WeWork's charismatic but controversial CEO is stepping aside from the communal office-space company he founded, another moment of reckoning between the fast-growing startup and its disenchanted investors. The New York-based company said Tuesday that Adam Neumann will be replaced by two co-CEOs: Artie Minson, formerly co-president and chief financial officer, and Sebastian Gunningham, formerly vice chairman. Neumann will remain on its board as non-executive chairman, the AP reports. WeWork's meteoric growth and carefully designed spaces with cool offerings like free beer and meditation classes gave it the aura of yet another tech company led by a magnetic personality. It was initially valued at $47 billion by private investors. But Wall Street began raising questions after the company delayed a planned initial public offering earlier this month.
The company was having trouble drumming up interest in the offering after revealing massive losses in its IPO filings. WeWork's revenue rose sharply to $1.8 billion in 2018, but the company lost $1.6 billion the same year. WeWork leases buildings and divides them into office spaces to sublet to members, which include small businesses, start-ups and freelancers who can't afford permanent office space. But with location operating expenses—mostly rent—amounting to some 80% of revenue, it has been heavily reliant on cash infusions from its private investors. Adding to its problems have been concerns about Neumann's behavior and the company's governance. "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. (More here.)