The Economy will Decimate WeWork
With an inevitable downturn, it’s not boding well for the already embattled startup
Public investors are done picking up unicorn feces at the stables. For WeWork, who approached with a hefty price tag, returned to the farm with an 83% valuation reduction — WeWork is now worth $8 billion expanding so furiously during the last decade that they could set $365 on fire every second. For the stablemaster that is Japanese conglomerate Softbank, it meant more operating losses, embarrassment, and an over-investment of $10.6 billion into a startup worth less than its cash infusion.
The outlook for WeWork isn’t great either, even with a lifeline from Softbank.
It’s a desperate attempt to plug the holes in WeWork’s financial hemorrhage. From replacing beer on tap with kombucha to purging more than 20% of its workforce, the new leadership team is undoubtedly scrambling to transform the company from a tech startup into an asset-heavy real estate firm.
How much did this new leadership team cost? At least $1.7 billion, which was the cost of former CEO and co-founder Adam Neumann’s ouster. This ouster made way for ex-Sprint CEO Marcelo Claure to take the reins of this bleeding unicorn and it wasn’t long before he gave his plans on sweeping financial reforms.
