WeWork Emerges From Bankruptcy and Reveals New CEO

After WeWork emerged from bankruptcy on Tuesday, CEO David Tolley departed the company, marking the end of a lengthy restructuring process that included strategy overhauls and closures of various branches.

Following Tolley’s departure, the co-working space chain appointed John Santora, a seasoned figure in the commercial real estate sector, as its new CEO. Santora’s most recent role was as the Tri-State chairman at the global real estate services firm Cushman & Wakefield.

Before filing for bankruptcy protection in November 2023, WeWork, once considered the most valuable U.S. startup, faced steep losses due to expensive leases and a dramatic decline in demand caused by the pandemic despite its rapid expansion.

Last month, a U.S. bankruptcy judge granted approval to WeWork for its restructuring plan. This opened the doors to eliminate its $4 billion in debt. The plan also involves transferring equity to the real estate company, Yardi Systems, as well as a group of lenders.

In February 2023, Tolley joined WeWork as a board member, and he stepped into the role of CEO in October. Under his leadership, the company navigated a turbulent period marked by significant operational and financial restructuring.

During Tolley’s time as CEO, WeWork underwent a significant downsizing of its real estate holdings, renegotiating over 190 leases and closing more than 170 unprofitable branches. These measures resulted in a reduction of annual rent and occupancy costs by over $800 million.

The company also obtained $400 million in new equity capital to fuel its future expansion efforts, simultaneously achieving a reduction in expenses exceeding 30%.

Although SoftBank Group held approximately 71% ownership last November in WeWork, which is a significant backing for the conglomerate, over time, it reduced the value of its investment. As a result, SoftBank is set to maintain a minority stake due to the loans it extended to the startup.

In April, WeWork rejected a $650 million bid from its co-founder and former owner, Adam Neumann, claiming that his offer failed to meet the required price threshold to persuade lenders. Toward the end of last month, Neumann dropped his efforts to reacquire the company. At the time, in a statement, he said, “The company looks to be emerging from bankruptcy with a plan that appears unrealistic and unlikely to succeed.”