SoftBank searching for new leader of office-sharing startup following exit of co-founder Adam Neumann
By Sarah Krouse and
Updated Nov. 11, 2019 4:53 pm ET
WeWork is in discussions with T-Mobile TMUS -1.63% US Inc. Chief Executive John Legere to take over leadership of the troubled office-sharing startup, according to people familiar with the matter.
WeWork’s parent, formally known as We Co., is searching for a CEO who can stabilize the company following the erratic tenure of its co-founder Adam Neumann. After WeWork’s failed attempt at an initial public offering, SoftBank Group Corp. 9984 -2.28% bought a majority stake in the company last month in a bailout, severing most ties with Mr. Neumann.
The startup is looking for a new leader who could join as soon as January, some of the people said. There is no guarantee that Mr. Legere, who stands to receive a windfall if T-Mobile completes its proposed takeover of Sprint Corp. S -3.27% next year, would accept the position or that another candidate won’t emerge. WeWork is also talking to other potential candidates, one of the people said.
Like Mr. Neumann, Mr. Legere is known as an unconventional executive. The 61-year-old has spent the past six years running T-Mobile with a pugnacious style, trashing his rivals on Twitter as “Dumb and Dumber,” using foul language and dressing in the company’s signature magenta. He has turned around T-Mobile’s operations, luring millions of cellphone customers from larger players and initiating the pending takeover of Sprint.
Two WeWork executives, Artie Minson and Sebastian Gunningham, have served as co-CEOs since September when Mr. Neumann resigned under pressure as chief executive. SoftBank executives are seeking to replace the duo with a high-profile candidate who they hope can turn the company around with an eye toward potentially taking it public in the future, the people said.
As WeWork ran dangerously low on cash, SoftBank stepped in with nearly $10 billion to steady the company and installed one of its own top executives, Marcelo Claure, as chairman and de facto head of the turnaround effort. SoftBank and its Vision Fund now own about 80% of WeWork.
When WeWork promoted Mr. Minson, the company’s former finance chief, and Mr. Gunningham, a vice chairman, it didn’t designate them interim CEOs. When asked last month at an employee town hall whether the two men would remain, Mr. Claure remarked only that the arrangement was unusual. It isn’t known what roles, if any, they might have should WeWork hire a new CEO.
Mr. Claure, who is chairman of Sprint, another SoftBank portfolio company, has been analyzing WeWork’s business and costs, pledging to work four days a week at its New York headquarters. Mr. Claure has sought help from another Sprint executive: CEO Michel Combes has spent time at WeWork’s New York office in recent weeks, some of the people said. Mr. Claure has told people that Mr. Combes is unlikely to become WeWork’s CEO.
WeWork’s parent, with revenue of $1.8 billion last year and a recent valuation around $8 billion, is far smaller than T-Mobile, which had revenue of more than $43 billion last year and a market cap of nearly $70 billion.
Mr. Legere is a veteran of the telecom business, a boom-and-bust industry in which technological changes can shift companies’ fortunes quickly. A Fitchburg, Mass., native, he worked previously at AT&T Inc. and was chief executive of fiber-optic network provider Global Crossing Ltd. before joining T-Mobile.
He has worked closely with Mr. Claure over the last year and a half to secure U.S. government approval for T-Mobile’s proposed $26 billion acquisition of Sprint. Both prolific Twitter users—unusual among big-company executives —they posted selfies riding electric scooters and running on the National Mall as they made their case to regulators.
But the deal hasn’t been sealed. Though approved by federal officials, it has been delayed by an antitrust suit filed by several state attorneys general. The trial is set to start next month. Mr. Legere said last week that the parties are discussing how to extend the deal’s deadline and didn’t rule out the possibility of renegotiating the price.
When it announced the Sprint deal, T-Mobile said Mr. Legere would run the combined company. But executives at the time told investors they expected the merger to close in the first half of 2019; they now say the transaction won’t close until next year.
T-Mobile’s share price is up nearly 240% since Mr. Legere became CEO in September 2012, compared with a 114% gain in the S&P 500 index over that same period. Shares of T-Mobile closed 1.6% lower Monday following The Wall Street Journal’s report on his potential departure, while Sprint shares closed down 3.3%.
T-Mobile paid Mr. Legere $66.5 million last year, and he was eligible to receive up to $109 million if the company met certain performance targets. When T-Mobile struck the merger deal with Sprint, it also extended Mr. Legere’s employment contract through April 30, 2020.
Mr. Legere has cleaned up messes before. He spent a decade at Global Crossing, leading it through a bankruptcy and to an eventual sale in 2011.
During his time as CEO, T-Mobile grew from a struggling No. 4 U.S. wireless carrier to a strong No. 3 that routinely wins customers from larger rivals AT&T and Verizon Communications Inc.
T-Mobile has spent years positioning Mr. Legere’s deputy, Mike Sievert, to take on more responsibilities. He was named chief operating officer and appointed to the board in early 2018.
T-Mobile’s marketing events have increasingly featured Mr. Sievert’s voice. When the company last week unveiled a series of consumer-friendly promises designed to win over skeptical state officials, Messrs. Legere and Sievert shared the stage.
—Drew FitzGerald and Liz Hoffman contributed to this article.
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