(Reuters) -WeWork said CEO David Tolley will step down after the flexible workspace provider emerges from bankruptcy later on Tuesday, bookending a months-long global restructuring process that featured a strategy revamp and exits from several locations.
The company will also name a new top boss later in the day.
Once the most valuable U.S. startup, WeWork expanded at a breakneck pace but racked up steep losses stemming from expensive leases and a sharp pandemic-driven fall in demand, before filing for bankruptcy protection in November 2023.
It received approval from a U.S. bankruptcy judge for a restructuring plan late last month, allowing the company to eliminate $4 billion in debt and hand over its equity to a group of lenders and real estate technology company Yardi Systems.
Tolley joined WeWork in February 2023, initially as a board member and then as CEO, leading the company through a tumultuous period that saw major operational and financial revamps.
During his tenure, WeWork downsized its real estate portfolio sharply, renegotiating over 190 leases and exiting more than 170 unprofitable locations while also cutting annual rent and tenancy expenses by over $800 million.
It also secured $400 million of new equity capital to support its business and future growth, and reduced its selling, general, and administrative expenses by more than 30% during the period.
In April, WeWork rebuffed a $650 million offer from co-founder and former owner Adam Neumann to buy the company back, saying his proposal did not offer a high enough price to win over lenders.
The beleaguered firm has said it estimates its post-bankruptcy equity to be worth about $750 million, a far cry from its valuation of $47 billion in 2019. Its reputation also took a big hit from a failed initial attempt to go public in 2019.
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