The WeWork corporate debacle has become a cautionary tale for the ages. Following a successful build-up in marketplace prominence, cache and value since its 2010 launch, global shared office space company WeWorkâs reputation came tumbling down after a botched attempt to take the company public earlier this year, followed by its largest investor SoftBank buying 80 percent of the company in October. Then, it was announced that founder Adam Neumann would step down and receive a $1.7 billion payout while the company would lay off 2,400 employees.
While the layoff is unfortunate, the real issue lies in how the company presented itself as ethically driven and then turned on the very people who helped build its success. On WeWorkâs website, the âOur Missionâ page still describes the organization as, âA place you join as an individual, âmeâ, but where you become part of the greater âweâ. A place where weâre redefining success measured by personal fulfillment, not just the bottom line.â Thatâs a tough pill to swallow.
From a PR perspective, I see several lessons. First, despite its clear success in building a community-centered corporate culture, most companies including WeWork are in business to become profitable and then either continue growing or thriving or pursue an exit strategy. When WeWorkâs exit strategy was mismanaged, the wheels of its carefully curated brand came off. As PR professionals, this is the time for crisis communications. Proactive, frequent and clear communication is key for sharing employee impacts and resources.
Additionally, in handling the news of Neumannâs payout and transition into an alternate role with SoftBank â in which he largely remains unscathed from consequences financially â the public and employee fallout is massive. The amount of proactive communications work that the communications team will need to do to rebuild trust in its (reduced) employee base cannot be underestimated. Also when a company takes a fall of this magnitude, communications strategies must include aligned messaging for all executives involved.
While it is impossible to control all aspects of a business and its ultimate success or failure, internal and external PR teams do have control over the way information is presented to employees and external audiences (besides regulatory filings, of course). Unfortunately, in the case of WeWork, their business leaders presented one PR story, while another version of reality played out when things took a downward turn.