U.S. Markets closed

With WeWork CEO Out, Scrutiny Turns to His Inner Circle

Ellen Huet
1 / 3

With WeWork CEO Out, Scrutiny Turns to His Inner Circle

(Bloomberg) -- As chief executive officer of WeWork, Adam Neumann had a close group of friends who worked for him at the co-working giant. Now that he’s resigned -- and WeWork’s new co-CEOs are looking to make changes -- scrutiny is turning to his inner circle.

WeWork Vice Chairman Michael Gross, Vice President of Operations and Special Projects Zvika Shachar and Director of Development Roni Bahar are longtime WeWork executives who were seen internally as divisive figures with strong personal connections to the former CEO, according to current and former employees. Shachar is a childhood friend of Neumann, and Gross helped lead some of WeWork’s early fundraising rounds.

After Tuesday’s shakeup, and with an initial public offering delayed, WeWork’s new leaders are turning a critical eye on the company. “We will closely review all aspects of our company with the intention of strengthening our core business and improving our management and operations,” co-CEOs Artie Minson and Sebastian Gunningham wrote in an email to employees. “We anticipate difficult decisions ahead.” 

The increased attention will include examining the roles of some of Neumann’s close associates, said two of the employees, who asked not to be named because the details are confidential. WeWork declined to comment. 

Read more about WeWork’s new leaders here. 

Within WeWork’s fast and loose culture, where tequila shots sometimes flowed after all-hands meetings, the three confidants often partied with Neumann in work settings and beyond, according to the employees.

The employees said Shachar and Bahar flew with Neumann on a Gulfstream private jet last year when the crew found marijuana hidden in a cereal box on the plane, an episode reported earlier by the Wall Street Journal. Shachar and Bahar did not respond to requests for comment on Wednesday. 

WeWork also paid Gross’s parents as brokers on a deal for a building in Miami, the two employees also said. Gross did not respond to a request for comment. 

WeWork’s IPO, through which it hoped to raise $3 billion and access $6 billion more in credit, went up in flames this month over concern about the company’s valuation, its unusual corporate governance, and Neumann’s management style and personal behavior. His ouster mirrors that of Travis Kalanick, who was Uber’s famously aggressive co-founder and CEO until he was forced out by the board ahead of a public listing. Some of Kalanick’s close associates left around the time he stepped down in 2017.

WeWork is continuing to work toward an IPO, though it is likely postponed until 2020, according to people familiar with the matter. As part of its efforts to salvage the offering, the company is weighing job cuts and shedding or spinning out non-core businesses, those people said. Eliminated positions would number in the thousands, one person said.

To contact the author of this story: Ellen Huet in San Francisco at ehuet4@bloomberg.net

To contact the editor responsible for this story: Alistair Barr at abarr18@bloomberg.net, Molly Schuetz

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.