The Rise and Fall of WeWork
Employees look back on a wild ride in Unicornland.
November 6, 2019
For many employees, WeWork’s proposition was as intoxicating as it was vague. “I bought into it,” a designer said, of the company’s vision—“this new ‘office of the future.’ ”Photograph by Kate Munsch / Reuters
was in a wine bar the other day, having drinks with a couple of WeWork employees, when a waiter arrived to take our order. He’d overhead some of our conversation. “Are you talking about Adam Neumann?” he asked. “I know that dude! I grew up with his nephew. He used to smoke weed with us.” Somehow, this felt natural. Everyone in New York seemed to be talking about Neumann, the barefooted prophet of the unicorn era, and about WeWork, the freelancer’s desk-sharing concern that he somehow transformed into the city’s biggest private office tenant, with outposts in thirty-two countries and a private-market valuation bigger than the G.D.P. of Serbia. It all crumpled in September, after WeWork’s I.P.O. failed. Neumann was pushed out—in a deal that made him a billionaire—and the company was taken over by the Japanese conglomerate SoftBank, its largest investor, at a valuation well below the thirteen billion dollars that the firm has now put into it. We obsessed over the story, I suppose, because it was a train wreck—and a relatively harmless one, compared with the ongoing catastrophe two hundred miles south, in Washington, D.C. The Trump Administration
is caging migrant children and enabling the deaths of Kurdish civilians. WeWork’s chief victims were SoftBank and the Saudi sovereign wealth fund, one of SoftBank’s biggest backers—and, of course, the company’s twelve thousand employees. But they didn’t want your pity.
“In retrospect, there’s no way this could have worked,” one employee, a software engineer, told me, sounding weary. He brought up the marketing expert Scott Galloway, who has compared cheap capital to a drug. “People were high. There’s not a human being in America who doesn’t look at the number forty-seven billion dollars”—WeWork’s valuation in January—“and not get goosebumps. It seems insane now, but at the time it made so much sense.”
I spoke to about a half-dozen WeWorkers, a sampling that was heavily tilted toward the architecture and building sides of the business—the company’s “core offering.” (The employees asked to be anonymous, to shield them from repercussions at work.) They used words like “sombre” and “uncertain” to describe the mood at the company. A new chairman, Marcelo Claure, had arrived from SoftBank and made a speech promising “bumpy roads” ahead. Early-stage projects had been put on hold. Many employees were wrapping up projects that had already been built, or slipping away for job interviews, or practicing self-care. A project manager whom I met for coffee said, “I’m going to yoga after this.”
Layoffs hadn’t been announced yet, but signs of belt-tightening were visible: free breakfasts had been reduced at the company’s office in the Financial District. Meditation classes had been pared back, from three per week to one. “I talked to the instructor,” one of my wine-bar companions, who works in real-estate development, said. “She was fighting to keep one class a week going, and not even for her own pocketbook. She was just, like, ‘Listen, I’m teaching three full classes every week. These employees really need it.’ ”
All of the employees I spoke to described a similar emotional trajectory. The first stage was romance. “Forget forty-seven billion dollars. I don’t know of a single architecture office worth one billion dollars,” another worker at the wine bar, a designer, said. “That was promising.” The company’s proposition was as intoxicating as it was vague. “I bought into it. I’ll admit it,” he said. The idea was “this new ‘office of the future.’ That, if you make work an enjoyable place to come to, you can probably improve productivity.” An architect said that she’d initially been skeptical of the company but was won over during her job interview, when she visited WeWork’s Chelsea location, its showpiece. “I have to say, the vibe there is magnetic,” she said. There were endless seating options: booths, extra-large couches, café-style tables. A barista whipped up lattes with vegan milk, and the central pantry offered wine, beer, and kombucha on tap. “It’s bright and bustling,” she went on. “People are chatting in small groups, or having coffee and working on a laptop. You’re convinced that they are busy and doing things well. It’s interesting, because that’s what they were selling: this energy, this magnetic, productive buzz.” The WeWorkers themselves had a specific look, which spoke of the excellent paychecks. The women favored tight jeans and motorcycle jackets. The men tended to be “sales bros,” the architect said. “The kind of guy who walks around with an Apple EarPod in his ear, talking to someone.”
Then came a literal honeymoon: a festival known as Summer Camp, which was mandatory for new employees. At the wine bar, my two drinking companions thought back to the summer of 2018, shortly after they’d been hired. SoftBank had just provided the company with a billion-dollar cash infusion. Eight thousand WeWorkers were whisked to a field outside of London, where they camped in tents for three days. Lorde performed, and the New Age guru Deepak Chopra led a meditation. The two employees had been tent buddies, and they’d experienced moments of what they called “foreshadowing.” “I think we crunched the numbers on the plane and were, like, ‘O.K., this is twenty-five hundred dollars a head just for the flights,’ ” the designer said. “On one hand, I was, like, ‘Wow, this is amazing.’ Most companies I’ve worked at, I’ve been lucky if they’d buy me dinner. On the other hand, from a business perspective, there were some red flags there.”
It rained on the first night, and the WeWorkers huddled under a tent, listening to Neumann speak from the stage. He broke into a televangelist bit, walking out into the crowd and pointing to random people, asking them to describe their “superpower.” The designer recalled, “People were raising their hands, like, ‘Pick me! Pick me!’ ” Some WeWorkers shared personal stories, and got emotional. “I’m like sitting there, like, Oh, my God. I don’t know how to feel about this.” The development worker, who is gay, said that he’d felt a twinge of discomfort when Rebekah Neumann, Adam’s wife, delivered a tearful speech, in which she declared, “A big part of being a woman is to help men [like Adam] manifest their calling in life.” (The festival also included a panel event in which the Neumanns talked about the success of their relationship.) “I was kind of grossed out by this whole religious, heteronormative undertone to everything,” he said. But he was having too much fun to worry about it. And he figured that there was more to the company’s leadership than the Neumanns’ theatrics might suggest. “There was always this assumption that, behind Adam, there was someone intelligent—a group of people—who were watching and making the practical, financial decisions,” he said. “That someone was taking care of it.”
Next came the middle period: a blur of frantic work.WeWork was in the business of delivering digital-style growth in the very analog sphere of commercial real estate. For the employees, this meant building lots of office spaces very, very fast. “It was chaos,” an architectural designer, who described herself as logistics-oriented, said. Design teams were huge. Trying to get everyone on the same page “was like herding cats,” she said. WeWork’s salespeople were not trained architects, and they “were always promising insane things like ‘We’ll get it done by October!’ And it’s July.” In the wine bar, the development worker said that, by January, 2018, “It felt like five years of your life had gone by. We were all a bit more jaded.”
The next stage was disillusionment. For the WeWorkers I spoke with, the turning point was at the company’s Global Summit, which took place in the Los Angeles Convention Center and featured appearances by the figure skater Adam Rippon and the twenty-one-year-old actor Jaden Smith. During Neumann’s keynote speech, he brought up his plan to create a floating WeWork, called WeSail, and to launch a WeBank. The architectural designer told me, “That made me very, very nervous.” One event was an onstage interview, conducted by Rebekah Neumann, with the Red Hot Chili Peppers front man, Anthony Kiedis. The event was mandatory, and thousands of WeWork employees filled the Convention Center and listened to Kiedis discuss his lifelong battle with heroin and cocaine addictions. The interview started to go off the rails. “At some point, it becomes clear that Rebekah has decided that she’s going to turn it into a sort of Dr. Phil session,” the designer recalled. She began pressing Kiedis on his recovery process and urging a solution. “She was asking, ‘Have you found your soul mate yet? You’ll be happy when you find your soul mate.’ ” Kiedis didn’t seem very receptive to the idea. The audience squirmed. “That was when it hit me,” the development worker said. There was no secret team of shadow executives. “There wasn’t anyone else running the company. It was just Adam and his wife.”
In the latest stage, the employees have come full circle. I had assumed that they’d be furious at Neumann and resentful of his billion-dollar golden parachute, but the onslaught of mocking press commentary had made them go from feeling angry and let down to becoming defensive. They stood by WeWork’s “product”—homey, convivial co-working spaces—and brought up all the good things that the company did: how it shaped the look of modern workplaces and pushed the stodgy real-estate business into the twenty-first century. They were especially proud of WeWork’s environmental measures like banning meat and single-use plastic. “Every company should be compelled to do that,” the project manager said. Of Neumann’s excesses, he said, “The number of times I’ve read the word ‘marijuana’ in the past month. Like, ‘The C.E.O. smokes pot!’ Who cares?” A few people expressed hope that Claure, the new chairman, could execute a turnaround, although the architect said, “I think it’s a little alarming that some people are still hopeful.”
WeWork’s critics on Wall Street have recently argued that the company was mislabelled: that it pretended to be a tech company but was really in the boring old business of subleasing office space. This may be true, but one of the upshots was that, for a little while, thousands of people in the relatively staid fields of real-estate development, design, and construction experienced life aboard a Silicon Valley unicorn: with stock options and twenty-five-year-old bosses, “hackathons” and free beer. The project manager mused, “I can imagine a scenario where, in two years, it’s almost like a graduating class has gone out into the city. And all these people will bump into each other and will be able to share stories.”
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