WeWork Welcomes a New CEO. Yet, Concerns Arise: Is He Jumping onto a Foundering Vessel?
In a bid to rescue SoftBank's $18.5 billion investment in WeWork, Marcelo Claure, the SoftBank operating chief, has appointed Sandeep Mathrani as the executive chairman of WeWork. This move comes after the resignation of Adam Neumann, WeWork's co-founder and former CEO, due to concerns about the company's real value and governance.
Mathrani, who spent the last 1.5 years as the CEO of Brookfield Properties' retail group and Vice Chairman of Brookfield Properties, is expected to relocate to New York from Miami. Prior to joining Brookfield, Mathrani was the CEO of General Growth Properties, one of the largest mall operators in the US. Before his role at General Growth Properties, he held senior positions at Vornado Realty Trust.
The new leadership at WeWork comes at a time when the company is facing significant challenges. The business plan involves layoffs, as indicated by the laying off of around 2,400 employees in November. The plan also includes a reduction in the pace of opening new locations compared to previous years. SoftBank has established a five-year business plan for WeWork, aiming to lead the company to profitability.
Mathrani's appointment follows unflattering reports about Neumann's leadership style, which led to the abandonment of WeWork's IPO dreams. Public investors raised questions about WeWork's value and governance after the release of its initial public offering paperwork. The commitment is significantly larger than the GDP of Bolivia, where Claure, the executive chairman of WeWork, comes from.
As the new top executive at WeWork, Mathrani will have to address these issues first. He owns a high-rise apartment that he acquired last year in New York, indicating his commitment to the city and the company. Mathrani's experience in the real estate industry, spanning across various roles in companies like Vornado Realty Trust and General Growth Properties, will be invaluable in steering WeWork towards a more stable future.
The five-year business plan, reported by an international publication, offers a glimmer of hope for WeWork's future. With Mathrani at the helm, the company may be able to overcome the challenges it currently faces and return to its former promise as a disruptor in the real estate industry. Only time will tell if this new leadership will be the turning point WeWork needs to thrive.
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