WeQuit: WeWork CEO Sandeep Mathrani Stepping Down to Join Private Equity Firm
By Nicholas Rizzi May 16, 2023 7:01 pm
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WeWork CEO and Chairman Sandeep Mathrani will step down from his post later this month to take a job at a private equity firm.
David Tolley, a board member at WeWork, was appointed temporary CEO of the coworking giant, while new board Chairman Daniel Hurwitz will start a committee to look for a new permanent CEO, WeWork announced Tuesday.
Mathrani’s last day is May 26. He’s leaving to become a director at private equity firm Sycamore Partners and head up its real estate activity, according to WeWork and Sycamore.
“It has been a privilege to lead WeWork during a notable transformation,” Mathrani said in a statement. “I am grateful to have been able to lead such a resilient group of employees who through it all stepped up to meet and beat every challenge.”
In a statement released by Sycamore, Mathrani added that he was “honored” to join the private equity firm that “has an outstanding reputation for driving profitable growth across its leading retail and consumer brands.”
Mathrani, a real estate legend credited for steering mall giant GGP out of one of the largest real estate bankruptcies in history, joined WeWork in February 2020 following a tumultuous few months for the coworking giant, which saw its initial public offering fail spectacularly, its value drop, the company almost run out of money, and its former CEO and bombastic co-founder Adam Neumann ousted. Mathrani later took over as chairman in March 2022 from Marcelo Claure.
The former CEO of Brookfield Properties’ retail group, Mathrani was touted by some as the “anti-Adam Neumann” and WeWork credited him with cutting more than $2.3 billion of recurring costs from its balance sheet, growing revenue, and eliminating $1.2 billion in debt.
In March, WeWork reached a deal with backer SoftBank and other investors to reduce its total debt to less than $2.4 billion by canceling or converting about $1.5 billion of it into equity and give it until 2027 to repay $1.9 billion, The New York Times reported.
But it hasn’t been smooth sailing since Mathrani took over. The coworking company weathered through the pandemic — finally going public through a special purpose acquisition company merger in October 2021 — and in January announced it would close 40 underperforming locations and shrink its Dock 72 hub in Brooklyn, cutting 300 employees in the process.
And its status as a public company has been under threat, with WeWork receiving a delisting notice from the New York Stock Exchange in April after its price dipped below $1 per share for more than a month. It has a six-month “cure period,” but its stock was trading at 35 cents per share on Tuesday.
Earlier this month, S&P Global Ratings downgraded WeWork’s credit rating, with analysts writing the coworking company’s recent moves were “tantamount to default.”
Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.
