WeWork Gets a New CEO. But, Is He Hopping Onto A Sinking Ship?
With WeWork getting a new CEO aboard, what are the probable chances of WeWork’s success?
As per a report from a top international publication, WeWork had forced to pull out its Initial Public Offering (IPO) during its last fall, and has appointed Sandeep Mathrani, as its top executive. There is a probability that WeWork had wanted to cement the impression that it doesn’t strive to be viewed as a tech company, rather it wants itself to be viewed as a real estate giant that is focussed on leasing space. Thus, they projected that it’s better to choose someone from the real estate world.
About Sandeep Mathrani
Sandeep Mathrani, in his professional life has spent the last 1.5 years as the CEO of Brookfield Properties’ retail group, and also as the Vice Chairman of Brookfield Properties. Prior to joining WeWork, Mathrani had spent eight years as the CEO of General Growth Properties, one of the largest mall operators in the US. This was until Brookfield had acquired it for $9.25 billion in cash in 2018.
Before this, Mathrani served as an Executive Vice President at Vornado Realty Trust, a real estate company with a market cap of $12.5 billion. It is reported that Mathrani would probably relocate to New York from Miami. As per public records, he owns one high-rise apartment that he had acquired last year.
The SoftBank Connect
Mathrani would be reporting to Marcelo Claure, the SoftBank operating chief, who was appointed as the executive chairman of WeWork in October. This was majorly done to help rescue, what Claure himself had said in an $18.5 billion bet on WeWork by SoftBank.
Once Claure had told his nervous employees that the size of the commitment that SoftBank had made to this in the past, and now is $18.5 billion. He even said that it is bigger than the GDP of the country that he comes from (Bolivia). Bolivia has a population of around 11 million people.
Compared To Adam Neumann
It’s not a secret that Mathrani is in stark contrast to WeWork’s co-founder and long term CEO Adam Neumann. Neumann was pressurised to leave resign from the company after his sweeping vision as a tech company.
Public investors began raising questions about its real value, and WeWork’s governance, as WeWork had publicly released the paperwork for its initial public offering.
Adam Neumann held a degree of control and after a series of unflattering reports about his leadership style, it didn’t take long actually to abandon WeWork’s IPO dreams. Mathrani would have to sort these first.
An international publication said that SoftBank had already established a five-year business plan, that would lead to the company’s profitability. The part of the plan involves layoffs. Like in November, they had laid off around 2,400 employees. However, at this juncture, WeWork must look forward to curtail its efforts to open new locations, even though, it acquires them at a slower pace than the previous years.
