WeWork CEO Sandeep Mathrani Resigns
WeWork CEO Sandeep Mathrani is stepping down.
Effective May 26, Mathrani will leave WeWork and be replaced by Board Member David Tolley on an interim basis. The coworking giant announced the leadership change in a press release on Tuesday.
Mathrani is joining Sycamore Partners as a director of its real estate activity.
Tolley, a former Blackstone private equity partner, joined WeWork’s board this year. A WeWork representative declined additional comment.
Mathrani spent over three years in WeWork’s top spot, succeeding interim co-CEOs Artie Minson and Sebastian Gunningham, who replaced co-founder Adam Neumann after his star fell in the aftermath of WeWork’s disastrous 2019 IPO attempt.
Mathrani was tasked with taking a company known for exorbitant spending and voracious growth and pointing it firmly in the direction of profitability.
“I find it invigorating to find solutions. I like the adrenaline, like when you are running a marathon and the endorphins kick in,” Mathrani told Bisnow in an interview months after he took WeWork’s top job. “There were a lot of levers to pull to make it profitable.”
Despite many waves of cost-cutting, WeWork never turned a profit under Mathrani. He did oversee a significant narrowing of the company’s bottom line, shrinking the red ink to a $299M loss in the first quarter of 2023, down from a $435M net loss in Q1 of 2022 and a $2B Q1 loss in 2021.
Even though he oversaw WeWork shaving its debt bill by over $1.2B, Mathrani leaves WeWork in a tenuous position, again due to challenges with the stock market.
Since the company went public in 2021 via a special-purpose acquisition company, its stock has cratered in value. With a value below $1 per share, WeWork is exploring options such as a reverse stock split to avoid being delisted from the New York Stock Exchange.
Unlike the self-inflicted wounds that defined WeWork’s first IPO attempt and Neumann’s subsequent ouster, the company’s current challenges come amid a punishing financial environment for all stakeholders in office real estate. Even though flexible workspaces gained a relative boost in the warming period after the first pandemic shock, WeWork closed locations late last year after acknowledging it had overestimated demand for its services.
Mathrani, who led Brookfield’s retail real estate arm before he arrived at WeWork, will now oversee private equity firm Sycamore Partners' real estate activities, including advising Sycamore’s portfolio companies on their real estate portfolios and operations.
