WeWork’s plan for a brighter financial future includes firing nearly 20 of Neumann’s family and friends and selling his $60 million private jet.

By Alison Durkee | September 27, 2019

With founder Adam Neumann now out as WeWork’s CEO, the company is taking drastic measures to preserve its future by distancing itself from the controversial former leader. The Wall Street Journal reports that new co-CEOs Artie Minson and Sebastian Gunningham are planning to slim down WeWork through extensive cuts, with an eye toward finally seeing out the company’s recently-postponed public offering likely next year. “We will closely review all aspects of our company with the intention of strengthening our core business and improving our management and operations,” the co-execs wrote in an email to employees after Neumann stepped down. “We anticipate difficult decisions ahead.” But there’s one move that doesn’t seem to be so difficult for the new leadership to take: showing Neumann’s closest allies the door.

Per the Journal, Minson and Gunningham are reportedly planning to lay off nearly 20 We employees who are friends and family members of Neumann and wife Rebekah Paltrow Neumann, who will be departing the company herself. The highest-level execs to depart, multiple sources are reporting, are Vice Chairman Michael Gross and We Co. Chief Product Officer Chris Hill, Neumann’s close friend and brother-in-law, respectively. Gross was one of several We leaders who frequently “partied with Neumann in work settings and beyond,” WeWork employees told Bloomberg Wednesday, and WeWork reportedly paid Gross’s parents as the broker for a real estate deal in Miami. (Bloomberg reported Wednesday that two other of Neumann’s party buddies, Special Projects Zvika Shachar and Director of Development Roni Bahar, are now undergoing scrutiny as well.) A group of 10-plus staffers referred to internally as the “oval office” will also be exiting the company, according to the Journal, including several friends who worked on Neumann’s personal deals. Beyond personnel, Minson and Gunningham will reportedly be relieving We of the businesses it’s acquired outside of its core leasing business, like event startup Meetup.com and office management platform Managed by Q.

One of the biggest hallmarks of Neumann’s WeWork legacy set to leave the company in his wake, though, is the former CEO’s $60 million private jet, which the post-Neumann WeWork is now planning to sell. The Gulfstream G650, which sources told Business Insider was a “corporate governance red-flag” to investors in the run-up to WeWork’s failed IPO, had recently reportedly been a sore spot for employees, as Neumann lavished money on the plane and parties while employees were denied bonuses and salary raises over a lack of resources. “The company was spending $60 million on an airplane, and I can’t get a decent raise? It felt like it was ‘We over me,’ unless me was Adam. And We was Adam,” a mid-level employee told Business Insider. Neumann spent even more money by renovating the jet, adding two bedrooms and Apple TVs—complete with shows and movies that staff members spent “three days straight” downloading—to the private jet, which the then-CEO frequently used as a meeting space. “I know of instances where people got on the plane, flew across the country, and flew commercial home,” one executive told Business Insider. (The Journal notes it’s unclear what will happen to other Neumann-era luxuries, like the driver for Neumann’s Maybach luxury car—which is itself worth more than $100,000—and the “spa and ice bath” attached to his office.)

Neumann’s ouster was prompted by the intense scrutiny focused on the big-spending exec in the wake of WeWork’s IPO crashing and burning, which included tales of Neumann getting kicked off a private plane for having too much marijuana, throwing an in-house concert with a member of Run DMC directly after laying off 7% of his staff, and telling employees WeWork could “solve the problem of children without parents” and end world hunger. So it’s no surprise that the company would immediately seek to distance itself from its controversial former leader in order to move forward. But now, the question is: Will it work? The company hemorrhaged nearly $2 billion last year and was desperately in need of the cash infusion that an IPO would have provided. “I think this company may go down to zero unless they take drastic moves right away. They’ve gone from heroes to targets in 30 days,” Scott Galloway, a marketing professor at NYU’s Stern School of Business, told my colleague Gabriel Sherman before Neumann stepped down. It looks like Minson and Gunningham are now taking the dramatic measures needed—but as Marx Realty CEO Craig Deitelzweig told Sherman, even those steps may not be enough to overcome the company’s flawed business model, which is based on long-term leases and short-term tenants. When the next recession hits and tenants decide to walk away from WeWork’s luxury spaces, Deitelzweig said, WeWork’s operations won’t be sustainable—even without Neumann blowing through money at We’s helm. “I do not think it’s a viable business, period,” Deitelzweig told Sherman.

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