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WeWork co-founder Miguel McKelvey, who started the now-embattled coworking company alongside Adam Neumann and was largely responsible for its industry-shaping aesthetic, is stepping down.
McKelvey, who has been WeWork’s chief culture officer, emailed employees Friday and told them he would be leaving the company at the end of June, Business Insider reports.
He described the call as "one of the most difficult decisions of my life — one that I'm not even sure has sunk in just yet," in the email. "While it's hard to leave, and I know there is a lot more work to be done, I could only make this decision knowing this company and our people are in good hands.”
He didn’t say what his next steps would be, but McKelvey has been living in London, according to BI, citing a lawsuit from a former employee.
WeWork shelved plans to go public last year amid concerns over its corporate governance, business model and soaring losses. Its valuation, which reached $47B, is now less than $3B. McKelvey, on a podcast interview in 2017, dismissed concerns over WeWork's sky-high valuation, which was then $20B.
"The value is irrelevant to the business problem," he said on NPR's How I Built This. "Who cares how much money you’re worth when you’re facing a business problem that is always evolving and that your primary interest is in solving?"
The company’s biggest backer, SoftBank Group, took it over last year, and pumped in billions to keep it afloat. But in April, it said it was dropping plans to buy $3B worth of WeWork shares, pointing to criminal and civil investigations of WeWork — as well as the coronavirus pandemic — as the cause. Both WeWork shareholders and Neumann have sued the Japanese conglomerate over its decision to renege on the deal.
McKelvey, a former architect, worked with Neumann to form WeWork in 2010, starting with a one-floor lease in SoHo. His net worth hit $2.9B at its highest, according to Forbes, but slid down to $900M after SoftBank agreed to the bailout, which has since been killed.
The company, like many flexible workspace companies, is facing a challenging time as companies look to cut costs and de-densify their workspaces.
It has reportedly been slashing rent for some tenants who will ink long-term deals amid the crisis. Sandeep Mathrani, who took over as CEO of WeWork after Adam Neumann’s ousting, said in a statement to BI that McKelvey has left "an indelible mark" on the firm. WeWork doesn't plan on hiring a new chief culture officer.
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