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Case Code: BECG165
Case Length: 17 Pages
Period: 2010-2020
Pub Date: 2020
Teaching Note: Available
Organization : WeWork Inc.
Industry :Real Estate
Countries : United States, United Kingdom,Germany, China, India
Themes: Accountability/ Corporate Governance/ Conscious Capitalism/ Brand Management/ Business Ethics
Case Studies  
Business Strategy
Human Resource Management
IT and Systems
Leadership & Entrepreneurship

The WeWork Fiasco



WeWork Inc. (WeWork), US’s leading commercial real estate company offering co-working space, was founded by Adam Neumann (Neumann) and Miguel McKelvey (McKelvey) in 2010. It started its business in New York City with one building. The company offered well-designed working spaces, with beautifully crafted furniture, designated work spaces, conference rooms, and well-spaced office cabins, blended with technological and analytical tools to its clients. By 2019, WeWork had expanded to 847 international locations. It was valued at US$ 47 billion in August 2019. WeWork filed for its first IPO with the Securities and Exchange Commission (SEC), US, on August 14, 2019. The filing invited a scrutiny of the company’s financial statements and revealed that WeWork had suffered consecutive losses from 2016 to 2018. In 2016, WeWork suffered a loss of US$ 430 million upon revenue of US$ 436 million. In 2017, its loss was US$ 890 million upon revenue of US$ 886 million, and in 2018, it suffered a loss of US$ 1.61 billion upon revenues of US$ 1.81 billion.

Subsequently, WeWork’s valuation fell to US$ 10 billion in September 2019 due to apprehensions among its investors. The scrutiny further revealed its co-founder and CEO Neumann’s extravagant lifestyle. Neumann was compelled to step down from his position as CEO in September 2019. Post Neumann’s ouster, Artie Minson (Chief Financial Officer) and Sebastian Gunningham (Vice-Chairman) were appointed as co-CEOs in September 2019. The same month, WeWork suspended the IPO indefinitely citing an unstable environment and lack of investor interest in the company. WeWork’s misfortunes continued as its valuation further fell to US$ 8 billion by the end of October 2019. The threat of bankruptcy loomed large.

In October 2019, WeWork’s biggest investor, Japan’s SoftBank Corporation (SoftBank), infused US$ 9.5 billion and thereby increased its stake in WeWork to 80%. SoftBank had been WeWork’s biggest investor since 2017. Its total investment in the company till 2019 amounted to US$ 19.9 billion.

In early 2020, WeWork was making further investments in new properties but at a slower pace under SoftBank’s ownership. WeWork hired Sandeep Mathrani (Mathrani), a real estate veteran of Indian American origin, as its new CEO on February 3, 2020. Mathrani assumed office on February 18, 2020. The company also hired former Ernst & Young executive Shyam Gidumal as its new Chief Operating Officer (COO) on February 20, 2020. With these changes, it remained to be seen whether WeWork would turn profitable in the future.

Business Ethics Case Studies | Case Study in Management, Operations, Strategies, Business Environment, Case Studies
Business Ethics Case Studies | Case Study in Management, Operations, Strategies, Business Environment, Case Studies
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The case is structured to achieve the following teaching objectives:
  • The dark side of entrepreneurship and the need for entrepreneurs to adhere to ethical considerations.
  • The issue of entrepreneurs engaging in questionable ethical behaviors, including intentional misrepresentations of facts.
  • The role of business ethics in the long-term sustenance of an organization.
  • The importance of corporate governance in the functioning of a company.
  • How leadership shapes the organization culture and governance practices in an organization.


Ethics; Entrepreneurship; Entrepreneur; Business Ethics; Corporate Governance; Organization Culture; Ethical Issues; Corporate Social Responsibility; Business Model; Transparency; Morality; Stakeholders; Disclosure; Board