WeWork co-founder Adam Neumann (Noam Galai/Getty Images for TechCrunch/CC by 2.0)
A new era is underway at WeWork. With cash running low and its IPO plans in shambles, the provider of stylishly appointed shared office space is yielding control to SoftBank, its largest investor, under the terms of a financial rescue package that marks the end of co-founder Adam Neumann’s reign.
The deal reportedly puts New York-based WeWork’s valuation at about $8 billion, a staggering comedown from the $47 billion level in its most recent private funding round.
Neumann is expected to receive a payout of up to $1.7 billion to relinquish his board seat and other roles, The Wall Street Journal reported. Last month, Neumann was ousted as CEO in the face of widespread criticism of his management and the company’s unorthodox financial picture.
The board of WeWork, which was in danger of running out of cash in a matter of weeks, chose SoftBank’s financing over a competing offer from JPMorgan Chase. The company faces tens of billions of dollars in rent payments. Various published reports have also cited WeWork’s plans, still in the works, to lay off as many as 5,000 people as it races to head off a cash crunch
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