New York CNN –
WeWork officially filed for bankruptcy this week, a seemingly inevitable development for the coworking startup that once promised to revolutionize office work but has been slowly unraveling for years.
Co-founder Adam Neumann’s well-documented excesses in WeWork’s early days have already inspired a bestseller and a star-studded miniseries. Neumann was extremely charismatic, selling his vision of building community and defying old-school office culture to investors who poured billions into his mission to “raise the world’s consciousness,” as he often said. The startup drove The wave of the venture capital-backed free money era peaked at around $47 billion before it all came crashing down.
Neumann was ultimately ousted in 2019, but received a multi-million dollar golden parachute and is now reportedly working on funding a new pseudo real estate startup.
But other people were seriously injured by the company’s demise. Legendary SoftBank investor Masayoshi Son hemorrhaged billions to prop up WeWork, suffering untold reputational damage in the process. And many of WeWork’s early employees, who worked at lower salaries because they received stock options, ended up with nothing.
Kelly Sullivan/Getty Images for the WeWork Creator Awards
Adam Neumann, founder of WeWork, speaks on stage at the WeWork San Francisco Creator Awards at the Palace of Fine Arts on May 10, 2018 in San Francisco, California.
The American tech sector has been built on many myths over the years, including the idea that founders are visionary geniuses who can predict important trends years in advance. The wild rise and fall of WeWork is the latest high-profile incident to shatter this myth.
Here’s a look at four of the wildest moments of WeWork’s rise, according to statements from the company and a best-selling book about the company.
Many former colleagues said Neumann had a penchant for marijuana and seemed particularly fond of using marijuana while traveling on private jets.
In the summer of 2019, Neumann and his friends smoked weed while flying across the Atlantic in a Gulfstream G650 private jet en route to Israel. After the group landed, the flight crew apparently found “a significant portion of the drug in a cereal box for the return flight,” the Wall Street Journal reported, citing people familiar with the incident. The owner of the jet recalled the aircraft due to this finding and was concerned about the consequences of transporting marijuana across borders, so Neumann had to arrange transport back to New York himself.
Neumann and his inner circle would also leave private planes full of vomit, wrote reporters Eliot Brown and Maureen Farrell in their company chronicle “The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion.” In one case, when Neumann was flying a private jet, the marijuana smoke was so thick that flight attendants working on the plane had to put on their oxygen masks, the book says.
A mix of layoffs and tequila
Neumann also had a fondness for tequila and saw no problem with drinking it in the office. (Part of WeWork’s efforts to appeal to millennials has included adding free-flowing beer and open bars to its coworking outposts.)
But sometimes alcohol and partying were thoughtlessly mixed in with work. One report said that just weeks after laying off about 7% of his workforce in 2016, Neumann addressed the cost-cutting efforts at a sombre all-hands meeting, saying it was tough but necessary and that the company would be better for it become. However, he then had employees enter the room with trays of plastic shot glasses filled with tequila, and shortly after, Darryl McDaniels of the hip-hop group Run-DMC came out and played a set for the employees while some were still absorbing the news.
Mike Segar/Portal
A fired WeWork employee carries a bag as he leaves WeWork’s corporate headquarters in Manhattan, New York on November 21, 2019.
WeGrow, WeLive and other aggressive side projects
At some point, WeWork also decided to reinvent parenting and the housing market.
The company opened an elementary school for children from preschool through fourth grade in fall 2018. The school, called WeGrow, was run by Adam Neumann’s wife Rebekah and had a mission to “unlock the superpowers of every person.” the company stated. The school’s tuition started at $36,000. In addition to the traditional curriculum, the children were also taught yoga, meditation and farming.
WeWork also launched a co-living experiment in New York City called WeLive. essentially rented hip dorm rooms with lots of amenities to young professionals.
Caitlin Ochs/Bloomberg/Getty Images
An alcove bed is seen next to the dining room in an occupied apartment unit in the WeLive building in New York, USA, on Tuesday, October 31, 2017.
The company eventually closed the school and divested itself of its housing projects.
The beginning of the end may be traced back to WeWork’s first attempt to go public in 2019.
The company filed its Form S-1 (essentially a registration statement for companies looking to go public) in August 2019. Within six weeks of the filing, Neuman was ousted as CEO.
The inner workings of the then privately held company were revealed in this S-1 form. Not only did the filing reveal unexpectedly large losses and raise big questions about WeWork’s path to profitability, but it also brought to light some of Neumann’s now-infamous potential conflicts of interest with management. (Neumann could argue that he served as CEO and everything he did was disclosed to and approved by the board.)
Mark Lennihan/AP
Adam Neumann, center, co-founder and CEO of WeWork, attends the opening bell ceremony at Nasdaq on Tuesday, January 16, 2018, in New York.
Perhaps one of the most obvious examples of this from the form was the revelation that Neumann and his founding partner registered a trademark for use of the “we” family trademarks and then went back and charged the company nearly $6 million for commercial use of it as part of its rebranding, although Neumann later changed his mind about it.
The post-Neumann era and the pandemic
In a statement earlier this week, Neumann called the news of WeWork’s bankruptcy “disappointing.” However, he expressed hope for the company’s future even after bankruptcy. “I believe that with the right strategy and team, WeWork can emerge successfully through a reorganization,” he said in a statement.
Tolga Akmen/AFP/Getty Images
A person works in a shared workspace near signage advising people to maintain social distancing at WeWork, coworking and office space in the City of London on April 13, 2021, as the company responds to COVID-19 health – and safety standards improved.
But even after Neumann’s departure, WeWork found it difficult to turn things around.
A key reason for this is that the Covid-19 pandemic struck just months after Neumann left the company, dealing an unexpected new blow to WeWork’s core business of bringing people together in coworking spaces.
And even years after the pandemic began, many office workers have become accustomed to remote work and are refusing to be asked into the office at all – leading to a flood of empty offices across major American cities.
Clarification: This story has been updated with more context regarding Neumann’s potential conflicts of interest disclosed in the S-1 filing.