The Wall Street Journal reports SoftBank Group Corp. has reached a deal to take control of WeWork, the communal office-space startup recently beset by problems. WeWork's board approved the deal, which would give co-founder Adam Neumann, who stepped down as CEO but remains on the board, $1.7 billion. Neumann is expected to exit the board, but remain a board observer and keep a stake in the company, though it is expected to be less than 10%. The SoftBank deal values WeWork at around $8 billion, much less than the $47 billion it was evaluated at when SoftBank made an investment in the company in January, and Mother Jones wonders if the startup is even worth that much. WeWork is expected to make an official announcement as early as Tuesday.
While SoftBank searches for outside leadership, one of its top executives, Marcelo Claure, is expected to replace Neumann as chairman of the board. SoftBank may also find a new CEO to succeed the two men who took over the job after Neumann stepped down. It was just weeks ago that WeWork was planning an IPO that was expected to be valued around $20 billion; the Journal describes the company's rapid collapse—triggered by its losses as well as concerns of Neumann's erratic management style, lifestyle, and what Mother Jones refers to as "sketchy insidery deals"—as having "little precedent" in the startup world. The Journal also reported Monday WeWork is planning thousands of layoffs, but delayed them earlier this month because it couldn't afford to pay the affected employees severance. (Read more WeWork stories.)