So SoftBank threw WeWork a life preserver this week, to the tune of something like $9.5 billion, and Adam Neumann walked away with a payout package worth over a billion dollars for running the company into a ditch. Im still turning that sentence over in my head because it doesnt parse right no matter how many times I read it.
Quick recap for anyone who hasnt been following the soap opera: WeWork was supposedly worth $47 billion back in January. Then the company filed to go public in August, people actually read the S-1, and it turned out the whole thing was held together by Neumanns cult of personality, a mountain of leases, and a corporate structure where he personally owned the trademark to the word "We" and charged the company for it. The IPO got pulled in September, Neumann got pushed out as CEO (though he kept his board seat and a pile of voting shares), and this week SoftBank stepped in with a rescue deal so WeWork doesnt run out of cash by next month.
As part of getting Neumann fully out the door, hes reportedly getting something like $185 million just to "consult," on top of SoftBank buying up close to a billion dollars of his stock and clearing a few hundred million in loans. Add it up and youre near $1.7 billion for a guy whose company just got marked down from $47 billion to somewhere around $8 billion in about nine months. Meanwhile Ive read that thousands of WeWork employees are staring down layoffs. Im not going to pretend I know the exact number thatll land, but the shape of it, the guy at the top cashing out while the people who actually did the work are the ones who might lose their jobs, is not exactly a new story in this industry. Its just a very expensive version of it.
Ill admit I have a soft spot for coworking spaces even though I think WeWork specifically always felt a little like a startup cosplaying as a hospitality company. I did a stretch of freelance work a few years back out of a shared office, not a WeWork, a smaller local outfit, and there is genuinely something nice about not working from your kitchen table every day. Free coffee, a door you can close, other humans nearby who arent your cat. But every time I walked past an actual WeWork location I got this weird theme-park feeling, like the exposed brick and the kombucha taps and the motivational wall decals were all slightly too on-the-nose, like a set built for a pitch deck rather than an office anyone was supposed to use for ten years. Apparently investors felt the same eventually, just a couple years later than everyone else did.
What gets me is how normal this all seemed for so long. A company loses over a billion dollars a quarter and its treated like a growth strategy. The founder does a lap of the office on roller skates handing out tequila shots and its treated like visionary leadership instead of, you know, a guy on roller skates handing out tequila shots at work. Somewhere along the way "disruption" stopped requiring you to actually be profitable, or even plausible, as long as the growth chart pointed up and to the right and somebody with a lot of money was willing to keep writing checks. SoftBank was that somebody, over and over, and now theyre the ones holding the bag, majority stake in a company thats worth a fraction of what they paid for it.
Im not saying WeWork the actual business, the desks and the leases and the offices people work out of every day, is going to vanish. Probably not. Offices still need to exist and some companies will always want the flexibility of a month-to-month lease instead of a ten-year commitment. But the mythology around it, the idea that this was some tech company reinventing real estate rather than just a real estate company with a tech companys spending habits, thats pretty much dead now. And I cant say Ill miss it. I just wish the bill for figuring that out landed on the person who ran the thing into the wall instead of the people who showed up to work there every day.