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Only three years after taking the helm, WeWork CEO Sandeep Mathrani is leaving his position on May 26. Board member and investment veteran David Tolley will serve as interim CEO until a permanent replacement is found.
“It has been a privilege to lead WeWork during a notable transformation,” Mathrani said in a statement on Tuesday. “Over the last three years, we have restored the brand, grown revenue, right-sized the company, restructured our debt, and developed new product lines.”
“I am grateful to have been able to lead such a resilient group of employees who through it all stepped up to meet and beat every challenge,” he added. “I am firm in my belief that this is WeWork’s moment. Having worked with David Tolley over the last several months, I know that his financial acumen and leadership will keep WeWork moving forward as it continues to disrupt and lead the industry.”
Mathrani joined WeWork during a turbulent time in the company’s history when a filing with U.S. Securities and Exchange Commission revealed significant losses and derailed the plan to go public. Founder and former CEO Adam Neumann also found himself in the hot seat as allegations of extensive drug use and other questionable behaviors led to his resignation from the co-working space provider in 2019.
After Neumann’s resignation, SoftBank, the company’s largest investor, revealed plans to provide a $975 million bailout. However, the Japanese tech company backed out of the deal in 2020, saying the company failed to meet “several conditions” as “significant pending criminal and civil investigations” placed WeWork’s future in limbo.
Despite rescinding the deal, SoftBank CEO Masayoshi Son said he had a plan for getting WeWork back on track, which included having Mathrani at the helm.
Since then, WeWork has been on a steady — and difficult — ascent.
The pandemic forced the company to close locations domestically and internationally, and led to strenuous rent negotiations with landlords at the height of social distancing protocols. Despite ballooning losses, the company went public in 2021 through a special purpose acquisition company (SPAC) BowX.
The company began trading at $11.28 per share and closed its first day at $13.49 per share, giving the company a market cap of about $9.3 billion. However, the company’s stock has fallen below $1 per share in recent months, resulting in its market cap tanking 91 percent to $745 million.
Even with dangerously low stock values, Mathrani struck an optimistic tone during the company’s first-quarter earnings report earlier this month. The company’s revenue increased 11 percent year over year to $849 million, while it trimmed losses from $504 million in Q1 2022 to $299 million in Q1 2023.
The company also said it completed a debt restructuring plan and eliminated $1.4 billion in corporate debt and extended the maturity of the remaining $1.6 billion until 2027.
“Over the past quarter we’ve continued to improve the fundamentals of our business while working to meet the needs of current and future members who seek turnkey, cost-efficient solutions for their office needs,ˮ Mathrani said on May 9.
Interim CEO David Tolley, SoftBank Group International CEO Alex Clavel, and WeWork Chairman of the Board Daniel Hurwitz all thanked Mathrani for his guidance and reiterated their confidence in the company’s path.
“I am tremendously excited to join WeWork’s management team as the company continues to grow and progress towards free cash flow,” Tolley said in a statement. “I am also grateful to Sandeep for his work and insight to ensure this transition is seamless for our members, employees, and other stakeholders.”
“Since joining the Board earlier this year, I have been impressed with the dedication and passion that the WeWork team brings to advancing our mission of empowering tomorrow’s world of work,” he added.