WeWork was supposed to reinvent office life. Unfortunately, it did.
If you work at a low-slung office-park, or a high-rise law firm, or a Victorian manse-turned-medical office, or any other of the previously normal office spaces where knowledge workers still work, you might not even know what it means to work at a WeWork.
That’s how people refer to them, if you didn’t know. “Oh, it’s a WeWork,” your friend at the lifestyle-media company or the stealth-mode tech startup might tell you when you meet for mezcal negronis before you both go back to the office for two hours. WeWork dizzily combines every trend in contemporary white-collar life: the “creative office space” vibes of advertising agencies and dot-coms, the dark-wood, chic-shanty vibes of today’s modish eateries. Its snack options—protein parfaits and dried seaweed—split the difference between manospheric “fuel” and campy “healthfulness.” Indulgence mates with generativity; tenants can get an IPA on draft, but only four glasses a day, a ceiling that betrays the ideal age and liver condition of the WeWork laborer.
Amidst its offices’ phone pods and nap rooms, Scotch-swilling Mad Men have been reimagined as swarthy, be-flanneled lumberjacks and jills, even though they are really just knowledge workers: front-end developers and social-media managers and the like. WeWork democratizes the all-inclusive, cruise-ship workplace style that helps giant companies like Google keep people at work by keeping them happy. At the WeWork that houses The Atlantic’s San Francisco bureau, a pink neon sign once hung, reading: “Do what you love.” What you love is working, isn’t it?
Co-working, the service WeWork provides, is just a fancy name for a shared office. It has been around for ages—the multinational Regus has rented offices by the month and conference rooms by the hour since 1989, for example. But in 2005, the software engineer Brad Neuberg reinvented the idea for the burgeoning tech economy. Co-working fused the individualism of tech bootstrapping with the collectivism of social movements. Offices got sharded into realms as small as one desk—every founder his own sovereign, but all contributing to that great collective: entrepreneurship.
The dot-com era had been formally corporate and exceedingly costly—all that money got spent on expensive office build-outs. Companies often bought their own racks of servers, connected to the internet on pricey T3 line leases, running expensive Oracle software. The next time around, tech would grow on efficiency—and by disconnecting itself from the burdens, and expenses, of the bricks-and-mortar world. By 2006, Amazon had started selling access to the infrastructure it had built to run its website, marketed as Amazon Web Services (AWS). The “cloud” industry, now worth hundreds of billions of dollars, turned all that infrastructure into a scalable, just-in-time service accessible to anyone. Co-working lured and then bred those anyones, blending their capitalist and bohemian ambitions.
The early co-working spaces looked more like flophouses than offices, but after the Great Recession, the idea both flourished and corporatized. WeWork then took the appeal of co-working spaces and turned it into a viable, holistic solution for businesses of all kinds. Leasing office space, especially in major cities like New York or San Francisco, is difficult and expensive. Like AWS had done for servers, WeWork offered flexible, affordable arrangements for one or one hundred, easily scalable as needed. Global access, event spaces, and even custom build-outs of entire floors, old-school style, are on offer. But so are “hot desks,” office suites, and, of course, IPA-provisioned pantries.
Unlike most earlier co-working spaces, WeWorks also provide operational services—not just catering and reception, but also financial, legal, IT, and all the other plumbing that makes it arduous to start and run a business. This full-service offering appeals to companies large and small, fledgling and flush. Your middle-class Facebook friend with the lifestyle business might have signed on, but so did Slack, a $12 billion, public company. In both cases, WeWork allows them to reduce their capital outlay, decrease their operational complexity, and manage the risks of a physical plant by outsourcing it—and to one service provider.
This promise helped WeWork swell into a real-estate behemoth. It employs 12,000 people and occupies over 20 million square feet of office space; last year it became Manhattan’s largest private tenant. The firm, now rebranded The We Company, has raised more than $12 billion in capital and until recently was valued at $47 billion. But in the last year alone, it incurred losses of almost $2 billion; over the past week the valuation was cut to $20 billion, the IPO postponed, and the company’s co-founder Adam Neumann stepped down as CEO. Profits have eluded the company; now prophets do too. The boutique agencies and app-devs and even unicorns can save costs by outsourcing office services to WeWork, but eventually someone has to pay for all those things without losing a dollar, let alone billions. As my colleague Derek Thompson put it, companies like WeWork have been “selling magic shows at a science fair.”
Adam Neumann’s overblown vision for The We Company is both the source of its success and the cause of its problems. Neumann has cited “energy and spirituality” as more relevant metrics for its potential on public markets than measures of its revenue and losses. The company was supposed to reinvent work itself, after all. Neumann’s leadership oversaw massive, rapid growth for the company—but it also seems to have been motivated largely by personal benefit rather than spiritual enlightenment.
The We Company’s Form S-1 outlined a labyrinthine ownership scheme that would have given Neumann more than half of the company’s voting power. Multi-class stock has caused problems for Facebook, Google, and other tech firms, but Neumann’s attitude was more brazen. He used his authority as CEO to pay himself $5.9 million for rights to use the new name, a change he had championed (he later returned it under pressure of scrutiny before the IPO). He poured tequila shots for employees after announcing layoffs. He bought stakes in real estate that WeWork later leased. He declared WeWork “meat-free” by fiat in 2018, but failed to outline what that meant for its hundreds of offices and thousands of tenants. Rebekah Neumann, a WeWork co-founder and its former CEO’s wife, served as both chief brand and impact officer—a title that underscores the company’s proselytic ambitions—and also as CEO of The We Company’s private elementary school WeGrow, which is charging $42,000 in tuition for this school year (I swear I am not making this up).
Both Neumann and another WeWork co-founder, Miguel McKelvy grew up, in part, in cooperatives. Neumann spent time on an Israeli kibbutz, and McKelvy on an Oregon commune. Some have speculated that those backgrounds helped draw them to co-working as a business, evangelizing collaboration through collectivism for the digital age. But Neumann, who has reportedly declared that he wants to live forever, has acted in a way that betrays his distaste for common goals and benefits—or at least an interest in them only insofar as they accrue wealth, power, and influence back to him. There’s another name for that kind of collective: It’s called a cult.
As a consequence of his departure, the power of Neumann’s voting shares will be reduced, ending his majority control. Neumann hasn’t spun his ouster as martyrdom, perhaps because he’ll still serve as non-executive chairman of The We Company, and perhaps because all the attention became personally irritating. In some ways, we should be encouraged that Neumann relented, and so quickly. In tech, even this scrap of hypothetical humility feels invigorating, like an afternoon office IPA.
But then again, WeWork’s recent troubles might only entrench its ironic, anticollectivist, winner-take-all market position. Much of the pressure to unseat Neumann came from SoftBank, the Japanese holding company that invested in WeWork via its $100 billion vision fund. That capital was raised partly from sovereign wealth funds (including from Saudi Arabia, which wants to diversify its economic prospects, currently bound largely to fossil fuels). SoftBank had the most to lose from WeWork’s more than halved valuation in advance of the IPO, and it might have made new promises to the board in exchange for delaying a public offering. Neumann’s resignation also gives SoftBank more time to regroup—replacing a CEO will take time, and the company probably won’t take another swing at the IPO before next year.
It’s hard to know what’s worse: a poseur collectivist lining his own pockets, backed by increasingly risky debt, luring legitimate businesses into an office-sourcing model that could collapse completely; or bankers beholden to oligarchs and absolute monarchs doing whatever they must to protect the upside of their massive portfolios, lest heads (maybe literally) roll. I mean, at least Neumann was pouring out tequila.
Who is the we who works in WeWork, anyway? If it’s the billionaires and the kings whose work is carried out by their capital, then they’re hardly getting a comeuppance. But if it’s us relatively normal people—you and me—then we should learn an important existential lesson from The We Company’s rise and, well, ebb: WeWork, dear reader, is really just office space. It’s the place you go for a job.
You spend a lot of time at the office, so it ought to be comfortable and inviting. You shouldn’t hate being there. It should facilitate your labor, and that labor should feel productive and impactful—and hopefully beneficial. But maybe you shouldn’t love it so much, either. Maybe real collectivism is incompatible with hard-striving, growth-at-all costs business. A company that leases value-added office space shouldn’t aspire to suffuse the apotheotic human spirit. Neither should the work you do when you work at your WeWork. A job is a job; a company is a company. People should celebrate with IPAs, not IPOs, anyway. And hopefully not at the office.
This post originally appeared on The Atlantic.