Business

Adam Neumann, the extravagant boss of WeWork ejected from the group he co-founded

His sometimes fanciful behavior and a certain madness of grandeur finally won Adam Neumann, who had to capitulate to the growing pressure of investors and leave WeWork, the company he has raised to the rank of giant shared offices.

Neumann had already had to step down as CEO in late September after announcing the postponement of the IPO of WeWork's parent company, The We Company.

According to sources familiar with the matter, he agreed on Tuesday to drop also his cap chair of the board of directors, the company comes under the control of the Japanese group SoftBank. The former fallen CEO will retain only a small stake in the capital.

The charismatic leader, aged 40, had for several years been able to convince investors to believe in his project, persuading in particular the Japanese billionaire Masayoshi Son, head of SoftBank, that his company insolent growth could be worth up to 47 billion of dollars.

Adam Neumann in January 2019 in Los Angeles. Under pressure from investors, he will definitively leave WeWork, the group he co-founded (GETTY IMAGES NORTH AMERICA / AFP / Archives – JEAN-BAPTISTE LACROIX)

But his management style, his controversial accounting methods and apparent conflicts of interest finally began to worry.

Various revelations about his drug use or some escapades have probably not helped him.

But it was above all the heavy expenses to increase the forced march and the worrisome situation of his treasury that accelerated the fall of Mr. Neumann.

Shortly after taking office, WeWork's new co-directors, Artie Minson and Sebastian Gunningham, began austerity.

– Profitable start –

A reclusive entrepreneur, Adam Neumann has already experienced professional failures.

Recognizable by his half-length hair and his casual style of dress, the Israeli-born businessman grew up in conditions that he himself described as difficult, between the divorce of his parents and multiple moves.

After five years serving in the Israeli army, he settled in 2001 in New York. Joined Baruch College for a business training, he thinks especially to party, he himself told the graduation ceremony of this institution in 2017.

He will eventually give up his studies to launch his first entrepreneurial adventure: retractable high-heeled shoes, which turn out to be “very dangerous”.

He then began making reinforced knee-length clothing for the children. Here too, success is not at the rendezvous. “At the peak of our success, we sold for 2 million, but we spent 3”, he remembered at Baruch College.

At the same time he met his wife Rebekah, the cousin of actress Gwyneth Paltrow. Married a few months later, they now have five children.

Adam Neumann often refers to the crucial importance in his work of supporting his wife. “The first time I saw him, even though he was broke, I could see that we were going to create something on a large scale for the planet,” she said in a podcast in 2018.

Associated with his friend Miguel McKelvey, he sees the potential of shared offices and creates in 2008 Green Desk. The concept of “coworking” is not new, but it has just grown in favor of new technologies, which allow work from anywhere, and the financial crisis that has forced many licensees of finance or creation to set up their business.

Because they wanted to build a “community that helps people make sense of their lives”, composed of “members” and no longer just “tenants”, they launch, with Rebekah, WeWork in 2010.

The company now manages more than 500 sites in some 30 countries.

But to fuel this growth, it burns a lot of money. In 2018, for example, it lost $ 2 billion even though it raised only $ 1.6 billion in revenue.

Adam Neumann, himself a workaholic, leads his teams at a frenetic pace and with a particular style, some employees hailing the inspiring energy of management, others lamenting a student atmosphere and constantly shifting priorities of the company.

Knocked out of his group, Mr. Neumann does not leave his hands completely empty. According to an AFP source, the former boss is expected to receive $ 1.7 billion, including $ 1 billion from the sale of a large part of his shares.

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