Leaked printing: What WeWork's new chairman told employees

Less than a year ago, WeWork was a superstar in the startup world, a fast-growing collaborative company with a mission to "raise world consciousness" and a $ 47 billion valuation.

But in recent months, the company has developed into chaos as it canceled its IPO, squeezed the founder out, and narrowly avoided bankruptcy with a rescue funding package from its largest investor, SoftBank, which took control of 80 percent of the company.

In an exclusive recording obtained by Recode, on Wednesday, the company's new CEO, Marcelo Claure, SoftBanks COO and the former CEO of Sprint WeWork addressed their concerned staff at their first meeting with all hands. He confirmed reported layoffs, but he declined to provide details on how many jobs, or which ones will be cut. He promised that the people who leave will do so "with dignity," and that those who remain must work hard to help the company make a historic comeback.

"It's not going to be easy, it's going to be bumpy roads," Claure said. "This was a race we won, and then all of a sudden, it's like we've lost momentum, and it's hard to regain that momentum. We need to regain the confidence of those business customers who will think twice: "Do you really have the financial resources?" We need to make sure our employees understand that we will never go through the existential crisis we just went through. ”

Claure continued to answer tough questions from employees about things like why the company's founder and former CEO Adam Neumann left the company with $ 1[ads1].7 billion while many employees face job insecurity and equity that are not worth much.

This transcript is easily edited for clarity.

Miguel McKelvey, WeWork co-founder and chief culture officer

I think I've run out of words to describe what's going on, from surreal to crazy to being incredible to – someone sent me a text yesterday – "bonkers", like all these things are true, and yet the reality is that we are still here and that we are still here together. I just want to remind all of us that we came here to do something meaningful in the world. While this may have been the craziest thing we have been through, we are not a company that has not been through crazy things before. For everyone who has been here for a while, we have all experienced things that were challenging for us personally, that were challenging for us as a team, that were challenging for us as a company to get through, and we have proven to be exceptionally resilient. We have always come back, no matter what we have been through.

The reality is, right from the beginning, we came back every month when we had to deliver a building on the first one, and we all went through the personal crisis with, “Can we cope? Can we make it through a new building opening? “Right now until we are experts on it, and we can carry it out all over the world. We are built on resilience. I think the way we have that resilience is because we believe in each other. We believe in our mission. We believe in what we came here to do. I believe that what we have today is an incredible vote of confidence in both that mission, as well as in all of us, in all the work we have done so far to get here, as well as in all the future work we need to do.

I just want to say with great gratitude, thank you to all of you, but also to our new partners in SoftBank. Incredible gratitude to them for believing in all of us. Each one of you should understand this investment as a belief in you, a belief that the people who invest in us as a company put their money behind you all and the belief that we can do something good in the world. [19659011] Now that said, there are going to be some very difficult times ahead for all of us. It's not going to be easy. We are going to go through tough times. Just as I always say, we're going to get through it together. If we share positivity, if we approach this with humanity and look out for each other, then we will definitely make it through it and we will come out on the other side stronger than we have ever been.

Thanks to you all. Thanks to you up here on the stage who have worked hard to bring this about. It's really humbling to see the effort people have made over the last month. That said, I think we're on … Today is a new day. We have as clean slate as we can get. Now it's time to move on and let go of things that have happened and bring that energy back, bring that magic back.

I just want to say, just get to know Marcelo in the time we've spent together, I had a certain scare: I don't know who this guy is, but I got a chance to meet him and just spend time with them. He is a person that you automatically … I automatically had respect for. I automatically connected to him. He felt like someone … who was open, who listened. I give him much credit for the way he approached things so far. I believe everyone, I believe that we should all learn to appreciate Marcelo and the rest of the team, the SoftBank team, who join and support us. I think they've been through this kind of thing before. They have experience, they have expertise and they are all here. They are all in on this. With that, again, thank you very much. I want to introduce Marcelo.

Marcelo Claure

Today is a … I will call this a historic day, on two fronts. One is that I have never been introduced to anyone taller than me. (audience laughs) It was like, that's good. It makes you humble. Second, for all of you, this is truly a historic day for a very basic reason. We have guaranteed the future of WeWork, but more importantly, we are putting the future back in our hands. There are no more days needed to raise funds. No more days are needed to prove to the investor community that we are a viable company. The size of the commitment SoftBank has given this company lately and is now $ 18.5 billion. To put things in context, it's bigger than GDP in my country where I came from. It is a country where there are 11 million people.

This is probably the greatest effort ever made. That's because we believe in the mission of this company. We believe in the leadership team, and more importantly, we believe we are on the verge of doing something unique, disruptive. I couldn't be more excited to be part of a company that is transforming the way people work. These are easier words to say if you haven't experienced it.

My last job, I was the CEO of Sprint. I met some people at WeWork. They basically convinced me to take over the entire company's headquarters. I think it was a real first Powered by We experiment. I've experienced it myself. Sprint was a 120-year-old company, tens of thousands of employees. When you walk through the corridors, the high cubicles, people didn't talk to each other, people didn't communicate. When we brought them to an open and collaborative space, the magic began to happen. When people used to tell me about the WeWork magic, it was hard to explain it, but once you've lived it and you understand it … So I'm a true believer in the brand, and … I love the experience because I have experienced it yourself.

It was interesting to be here today. I decided yesterday, I said, hey, we're done negotiating this deal, and we'll talk about … or you can ask any tough questions you want. I think we finished signing the papers, I left the hotel at 19.45. I came here at eight. I met Sebastian, I said, "I want to do a town hall with all the staff. “All my … Where is the Head of Communications for SoftBank? He is there. He's a little more conservative. He says, "You're out of your mind. People get pissed off, people get confused. Don't show up." Someone said to me, "Wait until the layoffs are done and come in." That's not my style. mine is that i want to be frontal, open, i think we have to be very honest with each other, here i am against any recommendation and i want to make sure we have a very honest question and answer and that we can talk to thank you.

I give you two minutes about me, I come from a country, from a tiny, small country, Bolivia, I am one of those stories about something not to happen. I was part of a team, of our Bolivian national team, not a player, but part of the leadership that took Bolivia to the World Cup. To put things in perspective, Bolivia is to the World Cup as a junior school team winning the World Cup. is not meant to happen, it's like the high school NBA that won Wor ld Series, never happened. It happened only once. It was the life experience for me because it taught me that anything is possible if you have a clear goal and if you have clear plans. It basically means that I made myself who I am today.

I started my first business. I went to a mobile phone shop to buy a mobile phone, ended up buying the store on credit, it grew to become the largest mobile phone retailer in the Northeast, expanded like crazy, changed business model, started a distribution company from behind my car, grew it to to become the world's largest distribution company, the world's largest wireless supply chain company. It reminds me so much of WeWork. We expanded to 70 countries. We grew from zero to $ 10 billion. We were profitable. We have always remembered it. Cash is king (the audience laughs), quite important.

Then I was at a trade show in Barcelona, ​​and I had a Japanese guy sitting next to me, and I told him my story. He said to me, "You must meet this guy called Masa. You and Masa are going to be fine. “I had no idea who Masa was. I googled Masa, and for those of you who haven't googled Masa, he's a pretty character, one of the most successful entrepreneurs, and I'd say the greatest visionary in the world. We met, he immediately understood what I was doing about buying used phones, used Apple phones and so on. He asked me, "How long did it take you to implement in Verizon?" I told him it took me nine months. He says, "Can you do it in three days in Japan?" Flew a team of engineers, translated a software, and we lived in 5000 stores. He says: "You can execute. Great. ”

Started working, a few months later I hear back from Masa. He bought Sprint. He tried to merge it with T-Mobile. He got a call from the government saying, "We love you, Masa, but it's not happening." I remember saying, "It's DOA." Then Masa looked at me and said, "What is DOA?" He said, "Lord, we are shaken." He looks at me and he says, "What are we going to do?" I said, "The first thing we should do is replace the CEO . He is not the right leader. "He looked at me and said," That's great. Do you want to be CEO of Sprint? "I said," There are probably a million people who are more qualified than me. "I said," I have my own company … "I had my own company, Brightstar. At that time, Brightstar was the first in the world with the largest Spanish business ever created.

Then I said to Masa, "I can't, I have a big company. It's worth billions. It sells billions of dollars of cell phones." He says, "Don't worry about it. I'll buy it from you if you commit to running Sprint for me. "I went to Sprint. Sprint was on the verge of bankruptcy, three to four weeks left by cash, one of the most iconic 120-year-old company, tough competitors, Verizon, AT&T, lost millions of customers, burning something like $ 5 billion in free cash, had never made money in the last 11 years. We put together a very clear plan. Everyone knew what they had to do.

Four years later, the first time ever, they generated We delivered the best financial results in our 120-year history, and as merciless as we are, we say, let's do this T-Mobile case again. We're in the final stages of hopefully combining Sprint and T-Mobile, which will be by far the best and most disruptive to the communications company in the world. So, did my job, ready to quit and go back to Miami to be an entrepreneur, and then Masa told me, "You're a great entrepreneur. You built a company from scratch, very successful. "He says," You're a good operator. You fixed Sprint. "He says," But you suck at investing. You know nothing about investing. "

He invited me to go to Tokyo. I lived in Tokyo for one year. I am responsible for seeing all the operating companies in the group, which means that all the companies we own more than 50 percent. In addition, I ran a Latin American fund that I was just starting out, moved happily with my family of six children, moved back to Miami, and then WeWork showed up. We've had many, many endless nights with Masa compared to what was next to do with WeWork. I would say that 99 percent of the advice we got is to cut your losses and step away, but Masa is definitely a believer in WeWork and the mission and the disruption.

You say why, right? The simple thing was to just unplug. There was no need. We didn't need to come in and invest in this size. We are initially investing in SoftBank. We invest in our reputation and invest everything we have to make this a success story. We want people to see this move as not a failure, but we want this move as a brilliant move. We had many, many nights of debate. Everything we see in the business, the more we dig, the more we love the business, the more corporate social responsibility we interact with, the more we love the business.

I went to a few WeWorks, hung out, watched what happened. Masa spent hours, he went to WeWork in Japan, sat, how many empty desks, who comes in and what time? Then we had to make a decision. We started to say, how big is this? The commercial real estate market is $ 70 trillion. It's just huge. The possibility of disrupting some of that magnitude, I look at it, it happens once in a lifetime.

WeWork is arguably the leader. We are ahead of it. We have what is called the first-mover advantage. Companies that have the first advantage are those who can take the lead and take it to another level. I think a good example of it is a company like Google, they came in, they started winning and they took it to another level, and the opposite is MySpace in social media – had the first advantage, but they turned it all up, Right? I think we are such leaders as it pertains to this space we need to make sure we take advantage of the initial advantage.

This company has a fantastic brand, right? I meet so many young entrepreneurs who come for us to invest, and most of them are in a WeWork office and they love it. They love the experience. They love the brand. It's a moment of pride when they say, "My offices are in WeWork." It's amazing that 38 percent of the world's largest companies, Fortune 500 companies, actually have contracts with us. I mean, these companies have choices. These are not companies … In many cases, a smaller company does not have a choice. They will enter into a short-term lease, but the large corporate companies, they have choices. There are many buildings where they can go. Choosing WeWork as a place to expand is on the mind.

We have a fantastic set of customers. Again, the stories that I have been told about customers who are willing to come and say, “Hey, if I can help you financially, let me prepay you. Let me help you through this crisis. “We have landlords, right? We have so many landlords. Even in these tough times, they have approached and are eager to become partners. They are eager to find different models that work with us. I think more importantly, and what is amazing is this dedicated workforce, the resilience that you have shown through this month. I don't think there is any other company in the world where hundreds of articles are written per hour, all kinds of articles, and that you are still here … because you have choices. We all have choices whether we want to work here or want to travel elsewhere. I think this dedicated workforce is what makes this place an incredible place.

When we decided to do this, we could look at it both ways. This is a massive challenge or a massive opportunity. I studied a few companies, the world's leading companies. Every leading company in the world has gone through a type of moment that we go through. Every company has had what is called these near-death experiences or these growth crises or these growth challenges, and that is what we are experiencing today. I call this a point of inflection. This is what we begin today. We have solved a very big problem, right? There are no more cash flow problems … Now we can give back and start focusing on what we know how to do, and that is to please our customers.

There is nothing more than I would like to prove to all the detractors who write articles about us that they are completely wrong and that there is magic to this business. They have no idea. They do not go to a WeWork facility to experience the type of product we have. We're going to work hard to make sure we get there, but it's not all about being an idealist, saying we're going to go, we're going to win. My goal over the next 30 days is to work with this leadership team, to work with Artie, Sebastian and all the incredibly talented members of the team to basically set up a plan. This plan will be very clear. We all need to know what each of us is doing. I need to make sure it's not a blank plan. I'll make sure there are numbers. I need to make sure we can measure. I need to make sure we can hold people accountable.

What you can expect from me is total … I'm going to be very lethargic. I'm going to communicate with you a lot … for the journey. I have a very strong work ethic. Everyone who knows me knows that I work extremely hard. I can't stand mediocrity. I will always lead by example. I'm never going to ask my team to do things that I'm not willing to do. Every company I've run, so far I've done well. I make sure I make a very simple plan, that every single employee or every member of our family really understands what each one should do. When you do that, you have a full-fledged workforce, and it's amazing what starts to happen when we're all in line.

Make no mistake, the world has changed. Growth stories no longer sell. This is about building a company that has a great product that pleases our customers, but also makes money, right? We are going to put together a plan and we will share with everyone. The danger of putting a financial plan in front of everyone is that now as a team we commit to it. Since this company is so public, everything you do in each newspaper appears even faster. We find out more about what happens to WeWork from the press than from ourselves. I am sure our plans will go public, which means the pressure will be on us to deliver what we commit to saying.

What do I want from you? I want a committed workforce. I want people to show up every day at work. All I can ask is give everything you have. It's not going to be easy. There are going to be bumpy roads. We have a lot to recover. We've lost some ground. This was a race that we won, and then it's suddenly like we've lost momentum and it's hard to regain that momentum. We have to regain the confidence of those business customers who will think twice, "Do you really have the financial resources?" We need to make sure our employees understand that we will never go through a crisis, the existential crisis we just went through.

So what else I want from you is total honesty and joy. My email address is simple. I read all my emails. It is [redacted]. You can write me whatever you want. Give me good ideas. Tell me when we do dumb things. What I'm concerned about is that we're going to read them. We may not reach them all if you send too many, so be thoughtful and send things that can truly transform. That's how we should play it.

Resignations, it's in everyone's mind, layoffs, termination, right? I don't have all the answers. I wrote you a letter yesterday. Will it be a layoff? Yes. How many? I do not know. It's day one. But what I want to guarantee you is the one who is asked to leave this family is going to do … We are going to make sure they leave with dignity, that we take good care of them and that we reward them for them had taken a chance on WeWork. For those who remain, we will give you full openness. You're going to be a partner. We will find out how you share in what we create together, in all the value we create together. We will be realistic about valuations. We are going to be very honest about how much this company is worth. We're going to set the clock again, start the clock again. I call it … this is round two or phase two in the life of this company.

I want to thank you again. Your resilience and endurance blow your mind. I don't think any other company in the world has gone through what you have experienced in the last two months. We are a story about a high valuation stock exchange, and we are also a story that in two weeks will run out of money. Now that it's out of the picture, I think it's incredible. My goal is to be part of one of the most amazing comebacks in history and to build with you one of the most amazing companies ever built. I want to prove all skeptics wrong.

Now I am happy to answer absolutely any questions you may have. I think there is someone with a microphone. Raise your hand. Don't be shy. I apologize in advance if I don't have all the answers as this is hour one on day one. If I have no answer for you today, I'll come back to you with answers. I can address pretty much anything we don't have … If I don't have the answers, most of the members of the management team are here. We have Artie, Sebastian and Miguel and we will try to answer any questions you may have. Then again, thank you for everything you do and I look forward to building the next chapter of WeWork together.

OK. Anyone want to raise your hand?

If you can say your name, and what do you do?

Employee 1

Hi. Sorry guys. My name is [redacted]. I work with Enterprise Services. I joined WeWork in January 2015, and I believe that just as amazing as the platform is, any instrument can be a weapon in the wrong hands. And so when we talk about growth and potential, what systematic tools should we put in place to make sure we don't lose our soul?

Marcelo Claure

It's an important piece, right? Don't think, "Hey, there's a new company coming in and going to remove the magic of this place," because sometimes it's hard to describe what WeWork is about before you really experience it. So we are going to be a company that will have very clear goals and want a leadership team that has responsibility. We are going to make sure we continue to grow, I like to call it profitable growth, which means we are going to be selective about where we invest our money. We're going to go back to the basics, and I call it WeWork. We're going to eliminate a lot of havoc. We need to consider which markets make sense to us, and which market it makes no sense for us to be.

And I think you're going to see us being a lot more focused on where we're going to play, in what parts of the world we're playing, which cities we're going to play in, and double down, tripling those cities. And we're going to go back to the basics. What the plan I have already set out to get out of businesses that they might have been a good idea for a company was more stable. But I think the size of the market that we have ahead of us, only in commercial real estate, it's just that big. And even though we're a big growth story, we're tiny. I mean, our revenues are compared to the size of the market, in some markets we are less than 1 percent of the real estate market. So you're going to see us do it.

We are going to put together dashboards so we can all see how we are performing on a daily, weekly, monthly basis and we are going to share it. We will have a culture of total openness when it comes to performance, considering how we are performing with the goals set. First, we must set these goals first. We need to sit down, plan, and work with the team to make sure we do it relatively quickly.

Employee 2

Hi, my name is [redacted]. I am part of Corporate Systems. I've got a question for you. When I came here, WeWork 1.0, this company had done some amazing things, meat-free policies, donations, charities, so on and so forth. How important is it to you when you write about the chapter in WeWork 2.0? These amazing cultures, the energy, meat-free are just one example, but so many other amazing things this company has done and is known for. How important is it to you when you're right in WeWork 2.0?

Marcelo Claure

It is very important because you have to have a workforce that is committed. You have to have a workforce that is having fun. And you have to have a workforce that wakes up every morning with the desire to come and give everything they have. And we will see and we will measure what are the things that make a difference. And that's going to be the determinant of what we keep as certain things just don't make a difference. And asked them to come from working with the team and understand what are the things that should make employees even more concerned with WeWork. Why is this important? If you do not have dedicated, happy, satisfied sales forces or teams, community leaders, how can we serve our customers? How can we sell a fantastic … WeWork is going to be a place where your companies will live through a great culture when we don't have it in our house?

So it's definitely a big area of ​​focus because we got one, you know, we had to drink our own Kool aid, we had to make sure that if we sell this magic to others, we had to have the same magic in our rooms, in our first-floor employees. So you can rest assured that what works remains and what doesn't work, you know, we're going to change that, and we're going to innovate to make sure we have a very high level of satisfaction. And we're going to measure it because it's easy to say you have a happy workforce, easy to say you have a great culture, but we're going to measure it and we're going to be really honest with each other. [19659053] And the only way we can solve problems we have is if we know what's wrong. And the only way we know what's wrong is basically you in the field in the countries, the management of the company, the customer service managers, the receptionists in the interest who interact with the customers. So we're going to have a big focus on understanding how we can only make sure we have a fully engaged workforce.

Employee 3

Hi, my name is [redacted]. (audience applause)

Marcelo Claure

Well first you have to tell me why the people like you so much? (audience laughs)

Employee 3

Because I asked a question at the last All-Hands meeting.

Marcelo Claure

Okay.

Employee 3

I'm with the Development Finance Group, I'm doing data analysis and reporting and today's my month's anniversary at WeWork. (applause)

Marcelo Claure

You are very popular for a month.

Employee 3

Well, I would like to say that although this has not been the first month that I expected when I started here, the meeting, all the people that I and I have had for the last month, whether it was within finance or legal or technology or the social associations throughout the company, they all want it in common. They all had a great love for the company and a desire to see it succeed. And I think they really are the secret sauce you need to help this company become what you need it to want it to be.

Employee 3:

And what I wanted to ask was, rightly or wrongly, when you take a shake, you know, layoffs are one of the first things to happen. I experienced, I think there were 10% layoffs at the end of 2015 you monitored. Can you tell us: A when you look at the numbers now, is there any chance that you think they may not need to be laid off? And B, can you compare and contrast the turnaround and layoffs at Sprint with what's going to happen here at WeWork?

Marcelo:

Okay. So yes, there will be layoffs, right? We must size the company according to the plan we have going forward. As I said, I do not have an exact number. I would be lying if I told you, but one of the things that no matter what we do, we are going to do it quickly and we are going to be very transparent. At Sprint it was, as we did it was incredible. I mean, people understood that what you are going to be laid off is not that you are incapable. It is the fact that we had to have a shrinking sales force for the company to survive. Very different. Sprint was about survival. Dette handler om å trives.

Marcelo:

Men det jeg kan fortelle deg, er hver eneste ansatt som forlot Sprint, e-postene de sendte, tenkte på å si slik du har behandlet det. I know these set the stage many times…what I was trying to do before, is before we’re going to choose, you know, which are the employees that we’re no longer going to need their services — is we’re going to get into shoes and we’re going to understand how can we make this less painful?

Marcelo:

It’s always painful. You know, they, they’re never, it’s never a day of joy, right? But it’s something that whoever is laid off, they’re going to know that they’re taking one for the team to make sure this company thrives in the future. We’re going to be fair financially to the people that we do that and we’re going to be very grateful for the services that they have given to WeWork. I want to get back. I want to get that behind us. I mean, that is important. So then we can have, we can be truly focused on what comes ahead, which is going to be, it’s all going to be about execution. If you go back to what I said before, we have absolutely everything that we need to be successful. We have size of the industry is enormous. The product customers love, they love the brand.

Marcelo:

The world is transforming. The only thing that we’re going to, we’re missing is going to be execution and the best way to have a team ready to execute is let’s get that behind us. Let’s figure out, let’s rightsize the, you know, the size, what is going to be the right size to run WeWork, and do that fast under this move towards, you know, towards delivering the plan that we’re all going to sign up for. And more importantly, let’s get back to building that energy that we have. I’ve noticed a change. I used to come here two years ago, three years ago as an investor. And the mood was a bit different. And I think that once we get all this stuff together, which we’re going to do fast, is I want to make sure that this place, this floor and the floors behind, below us are basically people thriving. And you can see that energy when people, and that’s going to be my job and I’m going to make sure I spend a lot of time in the way we do this.

Employee 4:

Hi. I’m [redacted] from recruiting. So in recruiting, one of the main thing is anytime we reach out to candidates for key hires, first thing they usually do is look at the media. So my question for you is, I guess what’s our strategy to kind of clarify things with the media? Right. So in S-1 one there were a lot of good stuff that the company is going through, right? Every two years a building. Most, a lot of our buildings are becoming profitable every two years. There’s a lot of positive things from the customer side that is not being covered in the media, right? It’s usually really, really negative. So I guess what’s our strategy for kind of turning that around?

Marcelo:

So a few things. I think we’re humble, we’re too humble in not showing the amazing success stories that we have from our members. I mean there’d be, there’d be so many incredible companies that are started with one or two employees here, you know we work facility and now they got hundreds and hundreds of employees and there are success stories and many of them have been done through living in this WeWork community where members interact with each other. And I think we got to get back to that in order to showcase. People come to great places to work. People come to work for a leader. Yes they do work for a company. But remember that…most people actually work for a person, they want to be part of a great company. And I think one of the things that has always haunted WeWork has been the constant valuation exercises and people talking. “How much is this company worth? How much is this company not worth?”

I mean, there’s some real, I mean, well, I also read the media and there’s some amazing, there’s some attacks whether this place, whether it survives or not. We have to tell people. We have to tell prospective employees that there’s a reason why, probably the largest investment company in the world and the tech world just basically bet 18 and a half billion dollars. So there’s zero risk of this company going bankrupt. There’s zero risk of this company ceasing to exist that is all behind us, right? Now, you can share with employees, I mean even in these tough crisis and we’re looking at the amount of buildings that we’re opening, the building, we just opened in New York is one of the most historic buildings. What we just did in London, what we’re doing around the world, in terms of opening, you know, thousands and thousands of desks.

Marcelo:

We’re going to double the size of this company in the next nine months. Tell me another business that you know of this scale that is actually going to deploy three to four hundred buildings, large scale buildings, implementation in the world. There isn’t any, I mean for big hotel chains they open one hotel, two hotels a month around the world. Where we’ve signed up to do is something that has never done before and that requires a different type of employee, but this requires people who want to be part of something that’s going to make history.

Marcelo:

I mean, think about it, it took us nine years to open this many buildings and in the next nine months, we’re going to replicate that. At the beginning, it’s easy, right? It’s just a few buildings. Now the size and scale that we’re today to do that, there’s a lot of people who get excited with that, to be a part of a company that’s going to make history and I think there’s a lot of people who want to be part of a comeback and we are a comeback. And we are going to be an amazing comeback and that’s how we got to sell, you know? And then more importantly is that we let the results speak for themselves. Right. We can talk all we want. We can do as many town halls that we can. The best way to keep detractors or to keep the media away is by showing results. By showing that we have a plan and showing that we’re executing that plan. That’s what we’re going to do as a group.

Employee 5:

Hello, [redacted] from the enterprise finance team. One of the things that I’ve appreciated that we worked on recently is the partnership with HBS and we’ve had the opportunity to take a couple of classes with Harvard professors. In the last case, it was actually for one of the Japanese railways. One of the first things the CEO did was change the focus of the company from cleaning to hospitality. WeWork in the press, so some people call us a real estate company, design, hospitality. A few months ago it seemed like leadership wanted to bring community to the world. You’ve talked a lot about commercial real estate. How would you define the scope or focus of WeWork going forward?

Marcelo:

Again, this is day one, but I will give you, I’m by no means do, I claim to have all the answers, but what I do see something I experienced myself and that is all you got to do is walk around corporate America and see how miserable those buildings are. I mean, the cubes are taller than me. People don’t communicate. People hate coming to work. You don’t even know if they show up or they don’t show up. And that’s across the board from pretty much all of corporate America. And then you contrast that to a WeWork facility where you working on this energy is just mind blowing, right? So that business alone, there’s just so much more to gain, right? Sure, we’d love to do other things. I mean, there’s tons of We other initiatives out there where I want to focus on our core business.

Marcelo:

I want to focus on what made this company successful at the beginning. And sometimes most companies that lose their path, it’s a great exercise to go back to the humble beginnings and understand what we were great at, execute the brilliant basics. And then after that, you know, let’s go experiment, but you never stop innovating. We’re always going to innovate and try new things and fail fast because companies that don’t innovate, you know, they will die. But in this case, we got to get back to the basics and providing an amazing experience to our members. You know, want to see those members are happy because if they’re happy at work, then they’re going to be happy at home and they’re going to establish those connections. So we’re going to go back to the basics is going to be all about WeWork. There’s not going to be any more of the We Company. And it’s going back to the basics that have made this company, I mean, one of the most top companies in the world.

Employee 6:

Hi, my name’s [redacted]I do Data Platforms for the global events team. My question is about how our leadership structure works now. We had founder and a CEO, we moved to co-CEOs, we now have a more active executive chairman. How do those relationships work? What are your spheres of influence. How do we understand when to play?

Marcelo:

I’m going to ask you to give me a little time to, for us to get organized a little better. I mean, I got a lot already. Sebastian, Miguel, they all jumped, you know, it takes a lot of guts to jump, you know, when there’s crisis, to basically say, “I’m here and I’m going to be the two co- CEOs,” And it’s not easy. Right? And I think what we have to do in the next couple of weeks is organize ourselves to create a culture of execution and accountability. And that’s what both Artie, Sebastian, we’re going to discuss, what is the best way to do it, but I don’t have a straight answer to tell you right now.

Marcelo:

Am I going to be a hands on leader? Absolutt. Have I committed to Masa, that I’m going to be at a WeWork facility from Tuesday to Friday? 100%. Mondays I’m going to dedicate myself to my other businesses. I go to many of the companies that I oversee, but I’ve made sure there’s last two, three days to pass on a lot of those responsibilities because I do want to make sure that this is a success. I want you all to understand that the easy way for us was to just get the hell out and just run away and we are betting on this team to make sure that we make WeWork for the most successful companies in the world and we’re betting our franchise, we’re betting SoftBank. Most people think that we are out of our mind crazy for what we’re doing, and that makes us more excited than ever because the opportunity is huge. And there’s nothing, there’s no better pleasure at the end than to prove all those detractors wrong. I always remember my first couple of weeks at a Sprint, this guy [Jim] Cramer that you see on TV.

Marcelo:

I remember my first, you know… I was in an interview and I say, you know, “This is going to be a long journey” and he basically says, “A journey to where? A journey to death.” And then four months later he says, “Oh my God, this stock has gone from $2 to $8 and they have traded billions and billions of dollars of value” and I want to do the exact same thing. All those detractors that write about us. You know, I want to absolutely prove them that they are totally wrong and that this becomes one of the best investments the SoftBank has ever made in his history. And for that I’m going to dedicate a vast amount of my time, until I find that this company’s going in the right direction. And once I got that, then obviously, you know, I’m going to spend less time. But until I feel that we are in the right path, I’m going to work very closely with the management team of this company to make sure that that is happening. I am not going to be an nonactive chairman to be certain of that.

Employee 6:

Buenos dias, Marcelo, welcome to the WeWork family.

Marcelo:

Thank you.

Employee 6:

Some people think that I’m a little bit crazy because I just moved from Argentina to United States just this month, but I believe this is, I just arrive in the right moment because there are plenty of opportunity that I think that are going to be opening. I just want to thank you. You, Sebastian, Artie, and Miguel too, to help us and support us to us. Especially in these moments. I think we really need all your support. Well, where you see for, maybe it’s too soon to make you this question, but where you see WeWork in a middle or longterm, what is your vision for the longer future?

Marcelo:

I mean again day one, hour one and a half. We’re going to be a great company with satisfied customers. I want to see a company where we are the partner of choice, right? Any growing company in the world should think rather than going and signing a 15 year lease with anybody, they should be able to, they should be the aspirational place should be, I want to go and live in a WeWork facility. I want to make sure that my company grows in a WeWork facility. When you look at companies, right? When you send an envelope next day delivery, you don’t say that right? You say “I’m FedEx you something” or you say “I’m going to Uber myself somewhere”. We are on the cusp of doing that and in some cities we have one, one, one and a half percent market share and once you get to two, three, 4% market share in those cities, then suddenly this whole thing changes.

Marcelo:

The power of WeWork is going to be seen at that and that’s what I want. I want every single enterprise that actually is expanding to think that the right way to expand is going to be using a WeWork facility. I want every single developer in the world as they’re developing new buildings or the current landlords, let’s say that they say that they say that the easiest way for them to fill their buildings is with WeWork. To take away that credit risk that sometimes they think about. And then thirdly is I want to make sure that we have a committed workforce where when we manage the net promoter score, none of our customers, but where we manage the net promoters score of employees, which is the toughest one to measure to measure that we are way up there with the world’s best companies. That’s where I want to take WeWork with the help of this management team.

Marcelo:

Obviously we want to be a company of growth. I would say a little different type of growth, a little more focused growth. And I want to make sure that as soon as we, this company is stable, you know we start thinking of ways on how can we expand, fast but smart meaning how we can invest less cash and actually leverage the power of the brand. How can we be doing most of our deals being managed deals? How can we do participate in leases and how can we make the investments in places where we put our capital in places that we know is going to work…And I think I’ve heard, you know, I’ve only been interacting with few members of the team and I think we all know what we have to do, but it’s a matter of putting it together in a plan and my goal is to deliver it to you guys in the next two to three weeks a very clear and concise plan that everybody knows which way we are heading to.

Employee 6:

Thank you.

Marcelo:

I was expecting a little tougher questions.

Employee 7:

Hi there.

Marcelo:

And if there’s something in your mind that you want to talk, there’s nothing that’s off limits.

Employee 7:

Hello.

Marcelo:

Hi.

Employee 7:

Hi there.

Marcelo:

Hey.

Employee 7:

My name is [redacted]. I’m in the marketing department. Thank you for being here with us today. It’s a big deal. It’s your first day, first hour. Something the company has received criticism for is gender diversity and lack thereof on our board and in our C-suite and in some layers of leadership. How do you think about diversity and inclusion efforts and knowing that the company has a massive list of priorities to tackle first, like execution and profitability. Will that remain a focus?

(audience applause)

Marcelo:

It should be. And before I address all of you. I had a, I call it my first management meeting on one of the topics that we talk is that there were a lot of women in the room, right? I mean, I think it was a good percentage, and I need to look at where are we today as it relates to the board, the management team and all the areas of the companies. And we should make it, you know, we should put a dedicated plan to make sure that this place is diverse. Not only men, women, but also, you know, one things that I learned is we should always, the management team should be a representation of the customers that we serve, right? And we’re going to try to work on that to make sure that we have a good representation, because that way we can always, you can only serve your customers better if they’re appropriately represented in your management team.

Marcelo:

And we’re going to put a real effort to make that happen. And I’ll be one of the priorities as long as other such as you were very clear, cashflow and profitability, and I want everybody to know this from a cashflow and profitability perspective. Don’t get confused again that, hey, these guys are coming just to try to strike some profit and all that. We’re not, we want this to be a growth story. We want this to be an amazing comeback story, but I understand that the markets are no longer interested in growth companies. And believe it or not, we have created that, right. So we’re going to have a plan that addresses growth, that addresses customer satisfaction, that address employee satisfaction, but at the end, if we execute all that right, then the results, all that will translate into financial results, which means companies are in the business of generating free cash flow so they can deliver it to shareholders and so they can reinvest in growing the business.

Marcelo:

This cannot be a business that, hey we want to grow, we got to raise more money and more money. The money worries should be gone by now, right? We have everything that we need financially to go fund this. So now you know, we will look at diversity to be honest — when a company is on the verge of running out of cash, do you care about diversity? No, this would be why the last two, three weeks were so crucial in terms of finding, I say taking back the company, you know, to our own hands. Now that, that’s secured, we started looking at other things and diversity will play a key part into it.

Employee 8:

Hello. Okay, perfect. You’ve answered a lot of them. But one question that keeps coming up is on the employee value proposition. Many people came here for high growth. We’ve had summit, summer camp. What do you see as sort of, you know, after we get through the restructuring, you know, why should people stay in this next phase?

Marcelo:

You know, hard to commit to what will stay, but what I can tell is I’m committed to create it, an amazing employee value proposition. And we got to determine what is done, what do customers appreciate and what makes sense. But I’m totally committed to that.

Employee 8:

Thank you.

Employee 9:

Hi, my name is [redacted]. I worked for the central data team. I run our central data warehouse with a couple other data engineers. It’s kind of a hard question to ask, I feel like, but today, you know, it’s in the news. We’ve seen in the news, Adam’s getting paid a billion dollars, right? Adam’s getting paid a billion dollars (audience applause), he’s getting a $185 million consulting fee. Okay? And for, I’ve been here since April 2017 and basically every quarter we’ve heard, trust me, trust me, trust me, trust me, trust me. We’re going to be more transparent. And this is an amazing business. We’ve done amazing things. We’re going to continue to do amazing things. But really the core of this question is, what are you going to do differently about transparency that you’ve never done before? What is it that’s going to change? We need to see change.

(audience applause)

Marcelo:

Good. Should we tackle the Adam? So let’s just…First, maybe it’s popular or unpopular. There’s a level of gratefulness that we got to have for Adam because he’s the one who built this business or the leader that built this business until today. And for that, for his vision, for entrepreneurship, for the drive, for the passion, you know, I’m never going to be ungrateful because the reason why I’m standing in this stage, well because he started that business. So I’ll start that. Now, businesses go through transition. There different leaders for different types in the business and this is why Adam is no longer here and this is why I’m here. Okay, payout? So the media loves to exaggerate things. Adam is a shareholder of the company and we believe so much in this company that we’re going to put a tender of $3 billion for any shareholder that wants to go sell their shares.

Marcelo:

Why are we doing this? Because when Masa, we decided that we need shareholders that share the same vision and passion with us. The amount of fight between shareholders, the amount of different opinions that there are. We want to make sure that people understand we’re here to grow, we work, and to make it profitable and to create a company that’s going to be one of the most valuable companies in life. But to do that, we want to make sure that any shareholder that wants to leave, we’re going to issue a tender and they’re going to have the ability to sell their shares. And we hope that the ones that are not committed to our plan can basically sell their shares. So Adam has the ability to sell. I have no idea if Adam is going to sell one share, a billion dollars, 500 billion. I don’t have the slightest clue what it is.

Marcelo:

But as a shareholder, he has the ability to sell his shares. He founded the company, he has a tremendous amount of shares. So nobody’s paying Adam a billion dollars or 1.7 billion dollars. That’s one. Two, Adam for whatever reason, borrow money from J.P. Morgan. And as part of this, you read in the news, you know the different packages that were being offered to the company. So we made the decision to lend Adam a certain amount of money for him to pay his loan. But in exchange as he sells those shares, he needs to pay us right back. So think about it we’re giving him a loan so we can…so those shares were pledged, so those shares can move back to Adam and then we can basically get repaid. And then thirdly, is we’re paying him a consulting fee. SoftBank is paying them a consulting fee for two different reasons.

Marcelo:

One is, Adam had voting rights of 10 to one, meaning Adam could do whatever he wanted. He had total autonomy for good or for bad, to do anything that he wanted and Adam has agreed to relinquish all his votes in favor of the board. He has relinquished being the chairman. And he has relinquish even being in the board of directors. He will now only be an observer with basically no voting rights. And that has a price and we thought that’s going to be a great investment to basically put the company back into our hands for us to be able to run it without having somebody with a gun, always basically voting shares 10 to one. That’s one side. The other side, I’d be foolish if I wouldn’t consult with Adam. There’s a lot of learning in some nine years. Sure, there’s a lot of bad things and trust and all the things you’ve said, but God, the amount of buildings that he have chosen, these amazing locations that you have around the world, the braveness in which you have basically gone and become one of the fastest global expansion companies.

Marcelo:

I have a lot to learn on one side of Adam and I do plan to use him, but he’ll be Adam with me, and me with you. So Adam is not going to have any role in the company, he not going to be in the board of directors, but I do plan to use some of his knowledge. So to summarize, he has the ability to sell as many shares as he decides to do.

It’s a loan, it gets paid back, so it’s not 1.7 billion dollars. And we pay him a four year consulting in exchange for getting a lot of his rights, getting some of his brains and to be fair, to be signing a noncompete that I still don’t understand how a company would not make him have sign a noncompete in the past. To be as transparent as it is, I’d like to put the Adam story behind us, the payout. Right. And I do understand how, it’s tough, it feels, but if I had to do it, I will do it all over again because this gives us the right to run the company without any intervention. And I think it was the right decision to do.

(audience applause)

Employee 10:

Hello. Hi Marcelo, my name is [redacted] I work in development. I know you said it’s day one, so maybe you don’t have an answer to that, but right off the bat, do you have anything in your head, about part of WeWork or the We company are already going away? And what’s your thought about construction and development? The future of WeWork having an inside GC and all these owners’ rep and all of us. What’s your thoughts about it?

Marcelo:

Yeah, I’m going to have my first construction meeting later today on.. I truly don’t have, I’ll be ignorant if I were to answer a question like this without having the facts. But we’re fast decision makers, we’re fast learners. My first meeting, I spent some time Sunday working hours with a small team of WeWork just learning. Miguel was nice enough to almost spend the night work together and at midnight yesterday I was understanding the culture and all the parts of WeWork. I’m going to learn fast, but it’s not my decision, we’re going to have a management team and we’re going to have very honest discussion in terms of should we really be in the construction business or not. So I really don’t have a clear answer to give you, but what I do promise is whatever, we’re going to make fast decisions to identify what we’re good at and what we’re not good at and what we have to stay in and what we have to get out of. Thank you. Should we take one more? I think there is, let’s do one, two and then you can finish with the audience.

Employee 11:

Hi, my name is [redacted]. I’ve been with WeWork for about three and a half years with real estate team. My question is directed to the types of decisions we make as a business as we’re now evolving into a more mature company. We’ve done a really great job of recruiting excellent talent all around the world and we’ve made some decisions for the sake of speed that might not have been the decisions we would make today. How would you recommend we change the culture of our company to start making those adult decisions even when they’re not fun for the sake of profitability and expansion?

Marcelo:

It all starts with the plan. I need to start with having an empower leadership team that can make the right decisions. We’re going to switch from this being a one man show that made every decision to actually having a model where leaders are empowered, but more importantly are held accountable to deliver the results…And you’ll find it’s such an amazing world when you’re empowered, when you actually take the responsibility, you will make a decision differently. When you’re treated with empowerment, when every dollar you spend, you spend it like if it was your own money. When nobody’s empowered and clear lines of responsibility or accountability are not clear, then terrible decisions get made, because nobody owns to decision. And that’s one thing that I’m incredibly strict and that is holding people accountable for investments that they decide that they’re going to do. We will always trust our leaders, but they got to deliver results and we’re going to be a culture of performance, empowerment and execution.

Employee 11:

Thank you.

Marcelo:

There is one more over there or have you realized that most of the questions are being made by women, who are totally brave?

Employee 12:

Hi Marcelo I’m [redacted]. So I love, lately there’s been a lot of conversation about how great community is and so much wonderful thoughts and talk. It’s also a really hard job. I don’t think it needs to be, but our buildings have a ton of defects, which is really just a result of the speed. So we constantly are trying to cut opex. How can we open buildings cheaper, which is awesome. But really all we do is just pay for it in capex, we pay for it in discounts, we pay for it in refunds. So my question is, when you’re doing these, you know, tough decisions for layoffs, will you be taking into account that we do need to keep a lot of people on to fix the defects?

Marcelo:

Yeah, thanks for the advice. Again, great companies are built on great products. You cannot offer a crappy product and expect to win. I’ve learned that myself in my last job. So we’re going to be maniacally, crazy focus to make sure that the experience that we offer to our members, it’s second to none. Right, we have this leadership among any other company, but if your product is not great, you will lose that leadership fast and that we at the end of the day, we’re here to provide incredible member experiences. And for that we’ve got to make sure that the product is incredible and for that our building needs to be great and we should eliminate defects as they come. So I’ll take that into consideration as we meet with the management team. Thank you.

Employee 12:

Thanks.

Marcelo:

Last one.

Employee 13:

Hi there. Actually I think there’s one more before the last one.

Marcelo:

Right.

Employee 13:

So I think what’s really wonderful is we’ve heard from a variety of employees that have been here from three and a half years to a month and I’m sure it’s on a lot of people’s minds and they haven’t asked you yet, but what are you going to do to help employees be made whole from their equity and help them participate in the tender offer if they’re underwater?

Marcelo:

Good question. I’m amazed how long it took to get there (audience laughs). Thank you because that is a really valid question. Too early to tell, but what I can commit is that I’m going to look at what is going to be the financial burden of basically readjusting the price of the equity or the option that employees have in the company to make sure we can all share in the options of the company with no more crazy valuations. Give me a couple of weeks. I cannot commit to something where I don’t know the entire, the potential financial implications, but if you have options that are underwater or that we know is going to take many years to get back, they’re worthless and nobody should have a worthless options when we are, think of this as a day that’s a new day, is a start over and I’m going to look at the compensation that we have set up as a company. I’m going to work with the HR team to make sure that we do something in this standard.

Marcelo:

Now, there’s conflicts, there’s shareholders….So I have to figure out how I get done, but that will be one of my assignments to show you that we’re committed to having happy employees everywhere in the world. So you have my commitment to do something. Don’t know what it is yet and hopefully meet your expectations.

Employee 14:

Thank you.

Employee 15:

Hello.

Marcelo:

You can clap. It’s okay.

Employee 15:

In your new role, people are also asking about Artie and Sebastian and the role that they’ll have as our CEOs?

Marcelo:

Yeah. I mean Artie and Sebastian are are the CEOs of the company, right? I mean, I’m an active executive chairman for the time being and but we’re going to work as a team, not only with Artie, Sebastian, but with all the members of the management team. There’s so much to do. There are companies in which you say, “Hey, I am the CEO, so get out my way.” I think that will be foolish. There’s so much stuff we have to do. There’s so much we have to fix. I was able to meet with Sebastian just for a few, what, 45 minutes yesterday and the list keeps on going and going on the stuff that we got to do. I’m a big believer in divide and conquer.

Marcelo:

Each one has his role and we’re going to divide responsibilities to make sure we tackle all the priorities that we have for the time being. So not clear. Let’s also be honest, the co-CEO thing, it’s an awkward situation. I mean, fair enough though, not too many companies have it. (audience laughs). Few have made it work, few have failed. So we’re going to have honest discussions with Artie with Sebastian, and I think more importantly, to figure out what is the right way to make this work. I’m behind Artie and Sebastian, there’s something, an incredible management team. I was blown away. We had a good meeting before this in which little by little people started expressing the issues that we have. And I think there’s just so much to do. I’m not here to control anybody. I’m here to contribute and hopefully you’ll take that from today’s meeting. So thank you for giving me your time and I look forward to doing great things together. Thank you.