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Businesses The Almighty Buck

2,000 WeWork Employees To Lose Their Jobs As Former CEO Adam Neumann Prepares To Walk Away With at Least $1 Billion (bloomberg.com) 261

WeWork's value has tumbled, about 2,000 employees are being cut and many investors are nursing losses after the firm's bailout. But founder Adam Neumann is still a billionaire. From a report: SoftBank's proposed rescue package of WeWork involves Neumann selling about $1 billion of stock and getting a $185 million consulting fee from the Japanese firm even as the deal values the struggling office-sharing company at $8 billion, according to people familiar with the transaction. That's down from an estimated $47 billion at the start of the year. Neumann will leave the company's board though he still can assign two seats. On these terms, Neumann's net worth would be at least $1 billion, according to calculations by the Bloomberg Billionaires Index. While that's a fraction of what it was on paper in January -- the last time SoftBank made an investment in WeWork -- it's a remarkable return from a business that has never made a profit and seen its initial public offering spurned by skeptical investors. Box CEO Aaron Levie quipped, "I've read almost every book on startups, and somehow have just completely missed the chapters that covered this part of the strategy."
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2,000 WeWork Employees To Lose Their Jobs As Former CEO Adam Neumann Prepares To Walk Away With at Least $1 Billion

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  • Ah, capitalism (Score:3, Interesting)

    by Dixie_Flatline ( 5077 ) <vincent@jan@goh.gmail@com> on Wednesday October 23, 2019 @09:59AM (#59338980) Homepage

    This system certainly rewards people for getting educations and working hard and playing by the rules. Yup.

    • Obliviously, in capitalism people with capital are rewarded. If work was more important than capital it would be called workism, or possibly laborism.
    • Re:Ah, capitalism (Score:5, Informative)

      by memnock ( 466995 ) on Wednesday October 23, 2019 @10:10AM (#59339018)

      My thoughts went along this line: "capitalism" - one turd gets more money than they'll ever need, while a bunch of people lose their livelihoods. Sounds great!

      • Well I mentioned this once before as a joke but more and more i'm starting to think it might be a good idea to have a maximum wage in addition to a minimum wage.

      • Re:Ah, capitalism (Score:4, Insightful)

        by RightSaidFred99 ( 874576 ) on Wednesday October 23, 2019 @12:06PM (#59339530)
        Only.. they didn't lose their livelihoods they will get new jobs because..capitalism. Also, they wouldn't have had those jobs at all had he not started the company so they should be glad they were able to milk such a dumb idea of a company for a job for so long.
    • this is Japanese capitalism. SoftBank is a Japanese company and the largest investor in WeScam

      The USA way is to let it go bankrupt, have some pieces bought up in liquidation and everyone's stock cancelled. Just like toys r us and every other company where investors got haircuts

      • Re: (Score:2, Informative)

        by spun ( 1352 )

        What about the "too big to fail" banks? Honestly, your distinction between American and Japanese capitalism is a false one, obviously concocted just to defend our own status quo. How's that boot taste? Tell you what, pal, we'll pay you $1.50 per hour to stand on a street corner and shout about the great taste of Master's Brand Jackboots.

    • This isn't Capitalism, but Protestant work ethic.

      Now on the average the Protestant Work Ethic will put you in a better position in a Capitalist society.

      Because Capitalism is mostly driven by Supply and Demand. So being a hard worker who is easy to work with is a desirable trait for an employee, something that isn't necessarily easy to to obtain. High demand and low supply. So you would normally get paid more on average.

      That said, there are a lot of other factors involved. Just because you are say the w

    • It makes more sense once you realize that the actual rules of the game are the set of behaviors that gets rewarded, and not what your parents, teachers, politicians, priests, judges, opinion writers, etc told you the rules are.

      Maybe that's the "getting an education" part...
      • But there have to be hundreds of thousands of rule followers generating wealth for each exploiter who manages to extract $1B.
  • Yes (Score:5, Insightful)

    by OrangeTide ( 124937 ) on Wednesday October 23, 2019 @10:02AM (#59338986) Homepage Journal

    A job is where you get paid a pittance on a regular schedule. There is no advantage to doing this. You don't get some security for taking a lower pay except maybe lower liability. Below are certain class we're all expected to do our jobs, because there is not an alternative.

    Now if you're part of the group pulling the levers of capitalism. You aren't working a job, you get paid according to a contract. Often as a lump sum. You found yourself here through connections and luck. Being a complete slacker won't get you here, but you can be a complete useless fool if you and your connections and convince others that you're a hard working innovator.

    That's how the system works today. You can howl all you want, but that won't change the system.

    • That's how the system works today. You can howl all you want, but that won't change the system.

      Curious, do you think that there exists something that can change the system?

      • Violence, would be my guess.
        The trouble with that, is after all the bloodshed settles, coming up with a better alternative... ...and then following through with it.

      • The system changes every day, so the correct question is "How do I get it to change my way," in which case the answer is "Bribe people." Always has been. It's not exactly a new idea.
        • Alternatively, find the people who support your position and help raise them up in the world to replace those who don't support your position. This is also not a new idea. This also happens every single day.
          • You can not make apples grow, but you can plant an apple tree, take care of it, and then wait and see what happens.
      • by Pascoea ( 968200 )

        Curious, do you think that there exists something that can change the system?

        Short of making sociopathic behavior a jail-able offense? No.

  • by nagora ( 177841 ) on Wednesday October 23, 2019 @10:05AM (#59339000)

    This is the result of the current economic climate: borrow billions to set up an unworkable "disruptive" business, become famous, walk away with a fortune and spend the rest of your life eating out on being the "unlucky" guy who's brilliant idea just didn't get off the ground because "reasons".

    You'll be interviewed about things you know nothing about (such as running a successful business), invited to conferences, and offered lots of other chances because no one except the mugs you employed will remember that you are a big old pile of walking failure.

    • by gosand ( 234100 )

      This is the result of the current economic climate: borrow billions to set up an unworkable "disruptive" business, become famous, walk away with a fortune and spend the rest of your life eating out on being the "unlucky" guy who's brilliant idea just didn't get off the ground because "reasons".

      You'll be interviewed about things you know nothing about (such as running a successful business), invited to conferences, and offered lots of other chances because no one except the mugs you employed will remember that you are a big old pile of walking failure.

      This has been going on for ~20 years now.

    • by sinij ( 911942 )
      Forget becoming famous and being interviewed, $1 billion is one hell of a consolation prize. Where do I sign up?
    • And let's not forget about the book - "Elevating Conscience (but Mostly Wealth)"

  • We're not there yet, but we're getting close. It's not much, but I'm guessing this asshole is probably going to have to watch his back for the rest of his life.
    • Nobody is afraid of you commie scum, he doesn't need to look over his back for anything. You're just cosplayers for Angry Rebellion. As for "this asshole" he didn't do anything wrong besides have a shitty idea for a dumb company, he failed but managed to succeed personally. Nobody else was hurt but other rich investors, the "job losses" are for people who never would have had the jobs in the first place without the company.
  • Comment removed based on user account deletion
  • That business has been around for many years, it is not in any meaningful sense a great disruptive new paradigm whatever.

    If they can charge enough rent to pay their costs and make a bit of profit they will succeed.

    If they don't, they won't.

    • by Nidi62 ( 1525137 )

      If they can charge enough rent to pay their costs and make a bit of profit they will succeed.

      If they don't, they won't.

      It doesn't matter if they can make profit or not (hint, they aren't making profit). The same guy who basically just got a $1 billion+ golden parachute also happens to own a sizable number of the buildings wework leases then subsequently rents out to customers. The whole thing wasn't designed to make a profit, it was to make sure the founder made as much money as he possibly could.

  • by OneHundredAndTen ( 1523865 ) on Wednesday October 23, 2019 @10:19AM (#59339060)
    My hope is that, within a couple of centuries or so, this kind of thing will be widely regarded with revulsion, embarrassment and shame similar to those that most of us currently reserve for the slavery business and its natural acceptance by all - particularly the religious groups - in the 18th and early 19th centuries.
    • First, it won't take centuries, we're talking decades, maybe even years at this point. Second, the whole 'money' thing is going to end. Sadly, you can't understand it, it would be like explaining breathing air to a fish, but don't worry, it's going to happen.

      • What do you think will replace money? post scarcity econ, or a regression due to global warming?

        • Unicorn farts.

          Money is just a proxy for other people's labor. As long as people need to do shit for other people there will be money, any other opinion is just commie fantasy bullshit.

  • by JoeyRox ( 2711699 ) on Wednesday October 23, 2019 @10:36AM (#59339148)
    People speak as if WeWork was mismanaged or "failed" in the six month interval between receiving a $47B valuation earlier this year to its $8B valuation now, and using that to say Neumann's parachute is egregious in light of those events. The only thing that actually changed was SoftBank coming down from their $47B valuation cloud, which WeWork was never worth. The reason they paid Neumann $1.7B to walk away is to save the $10B they've already sunk into the company. Neumann owned a plurality of voting shares so he wasn't about to walk away for free. If SoftBank had been monitoring their investment from early on they would have known Neumann was self-dealing and toxic to the company. The fact they only realized this after the public markets balked at Neumann's antics makes SoftBank look like rank amateurs.
  • I've always be curious how much the executives of Theranos walked away with ultimately. While Nueman clearly had a lot of conflicts of interest in his dealings and should have been slapped down by the board, at Theranos they were actually misleading investors so one would think borrowing against their shares to invest elsewhere should be considered the proceeds of crime.
  • "... and getting a $185 million consulting fee"

    Holy shit, and I thought my billing was a little towards the high end.

  • As the saying goes: A startup is a way to funnel investor money into the founders' bank account.

    So many business types work on this premise, and some do succeed.

  • These are wild shenanigans.... If investors are suffering due to business failure, then management has failed, and management should not be walking away enriched having failed.

    And by limit... I mean make all personal compensation for executives or contractee performing executive role above a modest salary not vest a substantial amount for at least 4 or 5 years and be so bound to success of the business that it will amount to little if the business fails.

    I would suggest that it be a legal limit for busin

    • There are a zillion reasons why this will never happen. The first reason is that if you want to bribe a politician today, you can't given him money. You offer him a highly paid job as a "public relations manager" / lobbyist. See? Then it is suddenly perfectly legal!

      The second reason is that if CEO fees are limited, shareholder fees will be next. And guess who's in charge?

      On top of that, someone whose conscience is not in the way of plundering his subordinates is exactly the kind of person the shareholders w

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