WeWork's Artie Minson, formerly co-president and chief financial officer, and Sebastian Gunningham, formerly vice chairman, will become joint CEOs of the company.
The decision, taken at a board meeting on Tuesday, follows a challenge to Neumann's authority by his biggest investors, including Japan's SoftBank Group Corp, venture capital firm Benchmark Capital and Chinese private equity firm Hony Capital, the sources said. The company's valuation, once estimated at $47 billion, reportedly has dropped to less than $20 billion and its initial public offering has been delayed.
Adam Neumann, WeWork's embattled co-founder and CEO, is stepping down.
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"In recent weeks, the scrutiny directed towards me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive", Neumann said in a statement.
We Company had vowed to press ahead with an IPO by the end of the year.
WeWork makes money by leasing buildings and dividing them into office spaces to sublet to members, who use an app to book ready-made offices or desks and get access to front-desk service, trendy lounges, conference rooms, free coffee and other services. They were also unnerved by deals We Co. reached with Neumann and entities he controlled. Neumann will stay on as chairman of the board.
The story of what happened is complex and still ongoing, but one particular thread stands out from the last month of WeWork news: CEO Adam Neumann's repeated self-dealing while leading the company.
These changes did little to address concerns about the business model for We Company, which rents out workspace to clients under short-term contracts, even though it pays rent under long-term leases.
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Still, Neumann, after cofounding WeWork in 2010, took the company global and now has 528 workspaces in 111 cities in 29 countries and plays host to more than 500,000 members, according to the company's IPO prospectus.
According to CBS MoneyWatch's calculations, based on WeWork's latest financials that were released as part of the documents that were filed for its stalled IPO, WeWork has about five months cash on hand - or nearly $1.5 billion -before it will either have to raise more money or face questions about its prospects.
Perhaps most alarming to potential investors were the ways Mr Neumann had blurred the lines between his own personal finances and WeWork.
His departure would be the most high-profile ousting of a tech entrepreneur since Uber sidelined founder Travis Kalanick in 2017 after a series of scandals at the ride-sharing company.
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