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WeWork and its embattled former CEO Adam Neumann will be fine, according to one crisis expert.
After a month filled with promise, starting with a blockbuster IPO announcement only to be stalled by a flurry of issues, both at the company and the off-the-field shenanigans of Neumann, the brainchild behind the real estate startup stepped down as the company’s CEO Tuesday to take on a different role after co-founding the company nearly a decade ago.
Neumann had reportedly lost trust with board members and investors in an on-going saga since WeWork announced it had plans to go public in August. Neumann’s management style came into question with reports indicating WeWork’s toxic atmosphere and his personal marijuana use on a flight to Israel.
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What went wrong for Neumann at WeWorks? He has some growing up to do, according to Ronn Torossian, a crisis expert and CEO of New York public relations firm 5WPR.
“Neumann is a genius, but it’s not surprising they don’t want him running a large publicly-traded company,” Torossian told Ladders. “Everyone knows what WeWork is and what they stand for and they want some adult supervision in the room. It’s understandable why this happened and it’s understandable why they don’t want him.”
Torossian, whose worked on brand strategies for L’Oreal and Walgreens and with personalities such as Wendy Williams, said one of Neumann’s pitfalls was running a potentially publicly-traded company as if it still was a start-up.
“Any executive needs to realize where they start and where they end up isn’t the same thing. No matter what level you’re at, you need to adjust to your level of success,” he said. “[Neumann] started the company at 20-something and he built a phenomenal company. But now he’s running a very large business and when you’re running a large business, you can’t behave like you are still running a startup.
“The reality is WeWork is a multi-billion dollar company at this point. His behavior didn’t coincide with running a company that large — that’s where he got himself in trouble. It’s not a surprise to me.”
Torossian said he thinks WeWork will be fine. The company named Artie Minson, formerly the company’s co-president and chief financial officer, and Sebastian Gunningham, an ex-vice chairman, as co-CEOs of the company on Tuesday.
Mass layoffs at WeWorks could be coming, according to multiple reports. TechCrunch reported an exodus could be on the way, with the company potentially axing up to half of its 15,000 employees to even out the expenses WeWork accrued from losses recently. The Information said executives at WeWork’s parent company have started to discuss shutting down separate divisions at the company and could layoff as many as 5,000 workers.
As for Neumann?
“He’s a very, very wealthy man — so you’re talking about what’s next for him,” Torossian said. “He’s a start-up genius. I think the world is very much open for him for what he wants to do…. [he’ll] go out and create many other good things.”