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WeWork’s New Chairman Outlines Turnaround Plan, Aiming For Profitability By 2021

Topline: A day after the company cut almost 20% of its workforce, WeWork’s new chairman, Marcelo Claure, addressed employees at an all-staff meeting on Friday in which he outlined sweeping changes to the business as well as a path to positive earnings by 2021.

  • In the meeting on Friday, Claure spoke about how WeWork needs to regain the public’s trust and outlined his plans to get the embattled office-sharing startup back on track. 
  • Claure said the company is aiming to achieve profitability, based on adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), by 2021 and have positive free cash flow by 2023, according to CNBC.
  • For now, WeWork is still reporting huge losses—$1.25 billion last quarter alone, a sharp increase from last year—which has prompted co-chiefs Artie Minson and Sebastian Gunningham, who replaced founder Adam Neumann after his ouster, to cut costs and sell off assets in a bid to save the business.
  • Claure confirmed that the current co-chiefs will stay on, even as SoftBank continues its search for a new CEO, according to Bloomberg.
  • The new chairman also announced the hiring of Maurice Levy, former CEO of French advertising company Publicis Groupe, and several SoftBank executives to WeWork’s newly restructured management team.
  • Claure, who is also SoftBank’s chief operating officer, is part of the management team being brought in by the Japanese conglomerate to stem WeWork’s losses.

Key background: Claure’s outline for WeWork’s new strategic plan comes a day after the company laid off 2,400 employees, or 19% of its workforce. It’s been a rough few months for the embattled startup: WeWork imploded starting in September, when it canceled its highly anticipated IPO amid concerns over mounting losses and irregular corporate governance. That led to the ouster of CEO and founder Adam Neumann, and since then the company’s new leadership has been selling off noncore assets and cutting costs in an attempt to save the business. The company was on the verge of financial collapse until it got bailed out by its largest shareholder, SoftBank, which provided a $10 billion lifeline.

Further reading: WeWork Lays Off 2,400 Employees In Latest Round Of Cost-Cutting

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