Adam Neumann Ouster Could Be The Best Thing For WeWork, Crypto Coins News

Adam Neumann Ouster Could Be The Best Thing For WeWork, Crypto Coins News

It has been a tumultuous month forWeWork. The company has seen its hopes for a successful Nasdaq listing disappear. On Sunday,Bloombergreported that the company’s board was considering removingAdam Neumannas the chief executive. In the latest episode, Neumann has reportedly started discussing his future role of the company. According toReuters, Neumann could become the chairman of the company. Alternatively, he could continue serving as the CEO but with an independent chairman.

Adam Neumann removal would be step in right direction

The removal of Adam Neumann would not solve the many problems the company is facing. It won’t return its valuation to where it was a month ago. His replacement will not change the company’s flawed business model. It won’t change investor perception about the company.

For now, his removal could the best thing that could happen for the company. This is because while Neumann is a visionary, he is not the right leader for WeWork. Hisbusiness practices– like selling the We trademark to WeWork and leasing his properties – are unfathomable.

To be clear, Neumann should not be the only person to leave. The entire board of directors should be shown the door as well. This is because the board surely must have known everything that was wrong about the company. They must have known there was nothing like acommunity-adjusted EBITDAand a space-as-a-service. They had to know thecompanywas not worth the $ 47 billion they sold to the market.

The future of WeWork

WeWork has moved from a Unicorn hero to zero within a month. The company has seen its impliedvaluationdrop from more than $ 47 billion to less than $ 15 Billion. Someanalystseven believe that the company is not worth $ (Billion.)

While the damage has already been done, the company can take some actions to improve its governance and reputation with Wall Street. The decision to remove Neumann is a good starting point. He should be replaced by an experienced real estate operator. In an interview with CNBC, Recode editor-at-largeKara Swishersaid that Trump could be a good CEO of the company.

The next step would be to replace the board.

After this, the company’s investors should be patient. They should stop thinking about an IPO for a few more quarters or years. In this period, the company should halt the excessive growth it has made in the past few years. This will help it demonstrate to investors that it can make money.

Obviously, this will mean making many sacrifices. The company will have toforegoa $ 6 billion line of credit that was to come from a slate of banks. The loan was contingent on the company having its IPO this year.

Investing in talent

In addition, the company will need to motivate its already demoralized employees who have seen their net worth decrease within a few weeks. Some of its core technology employees could jump ship to other established companies.

In fact, on Glassdoor, the company has some of the worst reviews among the unicorn companies. Only 59% of the employees would recommend it to a friend, while only 62% of employees approve of him. Compare this with Uber, where 84% and 94% of employees recommend it and approve of its CEO, respectively. As the company attempts a turnaround, improving these scores will be key.

Source: WeWork Glassdoor ratings

Finally, the new management will need to pray for a recession not to happen during the turnaround period.


Last modified (UTC): September 23, 2019 10: 26 PM

September 23, 2019 10: 30 PM

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