Sandeep Mathrani is stepping down as chief executive of WeWork, ending a three-year tenure at the coworking giant, which has yet to turn a profit after raising billions from investors to focus on cutting costs.
Mathrani will leave WeWork after next week to lead real estate investments at private equity firm Sycamore Partners, WeWork said, announcing a leadership change after the market close on Tuesday. Board member David Tolley will succeed Mathrani as interim CEO while a committee is seeking a permanent replacement.
Previously CEO of Brookfield Properties Retail Division, Mathrani Come to WeWork Replacement in 2020 Removal of co-founder Adam Neumann in top roles. Mathrani’s campaign as CEO has been limited by a late round of financial manipulation, which included debt reorganization and a reverse stock split Trying to boost WeWork’s stock price and avoid delisting from the NYSE.
WeWork stock closed at an all-time low of 35 cents a share on Tuesday. If its price doesn’t recover above $1, it risks being delisted.
“Over the past three years, we have restored the brand, increased revenue, resized the company, restructured our debt and developed new product lines,” Mathrani said in a statement. “I firmly believe this is a WeWork moment.”
Mathrani led WeWork to eliminate $2.3 billion in costs, more than $1 billion in debt and generate $849 million in revenue last quarter, up from $593 million in the second quarter of 2021, according to the company. But profitability remains elusive.
WeWork burned through $700 million in cash last year and will end 2022 with $287 million in cash on hand, down from the $924 million it had at the start of last year. It reported a loss of $299 million in the first quarter of this year, an improvement from a loss of nearly $500 million a year earlier.
Ratings agency S&P Global downgraded WeWork’s credit rating after WeWork’s debt restructuring with SoftBank in March, despite WeWork eliminating $1.4 billion in debt and extending the remaining $1.6 billion in maturities for another two years to 2027.
The latest at WeWork Earnings Conference CallMathrani forecasts the company will be cash flow positive by the end of 2024, having previously said the company will be profitable by the end of the year.
The company reported Monday that Mathrani received $6.4 million in compensation last year, down from $21 million in 2021.