WeWork is steadily trying to pull together a turnaround. This week, the coworking space leader made another C-level hire. Shyam Gidumal, a former Ernst & Young partner, will step in as the next chief operating officer.
The announcement comes just two days after WeWork’s new CEO, Sandeep Mathrani, started. Together, Mathrani and Gidumal will lead a revamped C-suite that is trying to bring WeWork back from the brink of disaster. It’s likely the two will foster a very different culture for a startup whose personality is heavily influenced by its former eccentric co-founder.
Mathrani, an experienced real estate executive, took over for co-CEOs, Artie Minson and Sebastian Gunningham, who were sharing leadership duties through the turbulent season. Both Minson and Gunningham will stay engaged as WeWork’s new executives settle into their new roles.
WeWork’s Historic Struggles
WeWork rose to prominence in the 2010s, revolutionizing how entrepreneurs and small businesses think about traditional office space. At the height of its power, the company raised tremendous capital from hungry investors, culminating in a $47 billion valuation. Today, WeWork manages office spaces in hundreds of cities all over the world.
However, WeWork had several major setbacks in 2019. The business’s IPO failed spectacularly back in August, as the IPO filing drew attention to the fact that the unicorn startup was bleeding money. Former CEO, Adam Neumann, was also ousted following reports that he facilitated a toxic culture and had free reign to do what he pleased. WeWork also had to let 2,400 people go in November.
The Japanese conglomerate, SoftBank, injected $5 billion into the business and accelerated a $1.5 billion equity investment to stave off bankruptcy. SoftBank came out an 80 percent owner through the bailout and aims to refocus efforts around core operations. The move has cost SoftBank credibility as the firm is trying to raise funding for its Vision Fund 2. Year over year, the company’s profits plummeted 99 percent in the last three months of the year.
A New Season for WeWork
COO Gidumal has extensive experience leading organizations through transformative change. Before joining Ernst & Young, Gidumal enjoyed a successful career at the management consulting firm, Boston Consulting Group. His primary focus right now is getting WeWork back on track.
“I’ve spent my entire career managing or advising companies…to help position them for long-term success,” said Gidumal in a statement. He also vowed to work “across all levels of the business on our path to profitable growth.”
Gidumal’s peer, Mathrani, is a seasoned veteran when it comes to growing real estate-type businesses. Mathrani now reports to executive chairman, Marcelo Claure, who is also a group COO with SoftBank. Claure is a tech mogul himself and played a big role in Sprint’s turnaround.
After a decade of following Neumann and his tequila-drinking ways, WeWork is on the fast path to new life. We’ll see if the company that brought coworking into the spotlight can regain its footing. Long gone are the days when hyper-growth alone was enough to satisfy investors. Finally, profitability is back on the map.