New WeWork exec defends Adam Neumann's $1.7B payout amid layoffs
WeWork’s new chairman is defending a $1.7 billion payout to co-founder and former CEO Adam Neumann amid looming layoffs, while emphasizing that the company now faces "zero risk" of bankruptcy.
Marcelo Claure told employees that Neumann, like any investor in the company, had a right to sell his shares, according to an audio recording of a meeting with employees obtained by Reuters. “There’s a level of gratefulness that we’re going to have for Adam because he’s the one who built this business," he said.
WeWork didn't immediately respond to a request for comment from FOX Business.
Neumann's payout is part of a financial rescue package that hands control of the company to Japanese tech giant SoftBank and abandons the more grandiose of the former CEO's plans.
The takeover values WeWork at $8 billion, a fraction of the $47 billion valuation that SoftBank had assigned the company in its last round of financing in January.
“SoftBank is a firm believer that the world is undergoing a massive transformation in the way people work,” SoftBank founder Masayoshi Son said in a statement. "WeWork is at the forefront of this revolution."
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“Since the vision remains unchanged, SoftBank has decided to double down on the company by providing a significant capital infusion and operational support," he said. "We remain committed to WeWork, its employees, its member customers and landlords.”
The deal throws WeWork a lifeline as it attempts to turn around a money-losing business model that had lost favor with potential Wall Street investors.
WeWork has been scrambling for cash since its attempt to enter the stock market floundered last month, a stunning fall from grace for a company that until recently was considered one of the most highly valued start-ups in the U.S.
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The Associated Press contributed to this report.