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Embattled coworking firm WeWork has a new head, five months after its former CEO’s surprising resignation.
David Tolley, who has been a member of WeWork’s board since February and has been serving as interim CEO since May, will stay on as the company’s permanent CEO, WeWork announced Monday.
“David is a proven leader, with an exceptional track record of running complex and high-impact businesses, and has brought immense energy, discipline, and focus to WeWork since stepping into the role on an interim basis in May,” Paul Keglevic, chair of WeWork's board since September, said in a statement. “We are confident that David is the right leader for this pivotal moment and in his ability to drive WeWork’s continued transformation.”
WeWork’s share price rose by more than 1% in the three hours after the announcement. But the bump follows the 25% tumble its stock experienced following former CEO Sandeep Mathrani’s departure from WeWork in May and after Fitch Ratings downgraded its credit earlier this month. That downgrade came after WeWork said it wasn't paying $95M in interest payments.
Tolley will continue the work he had started as interim CEO, the announcement says, including renegotiating all WeWork leases to slash the beleaguered coworking company’s rent costs. The company said it plans to continue investing in its buildings and other offerings.
WeWork remains well-positioned to step in as companies continue to rethink their needs for flex office space, Tolley said in a statement.
“Over the past few months we have taken decisive and focused actions to improve our business,” Tolley said. “The steps we are taking now to achieve our goals not only help us achieve profitability and sustain growth, but will position us to serve our members better for the long term. I emphatically believe we’re on the right path.”
Tolley was most recently chief financial officer at satellite company Intelsat. He has also held roles at Blackstone, where he was a private equity partner investing in media and communications, as well as an investment banker at Morgan Stanley.
“David’s fresh perspective, extensive experience, and strategic leadership have brought immense value to the company,” a WeWork spokesperson told Bisnow by email. “The Board is fully confident in David’s ability to drive WeWork’s continued transformation as we build a stronger and more profitable company that is positioned to invest in our offerings and member experience.”
Interest in flex office space is high. Approximately 41% of office tenants expect to incorporate more flex space into their footprints as part of their long-term return-to-office strategies, according to an August report from JLL. However, there are more operators in the flex space business, including WeWork rival Industrious, than when WeWork first began. JLL also found landlords are increasingly exploring the idea of creating their own flex brands for their underutilized spaces.
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