Miguel McKelvey is leaving WeWork, the embattled office-sharing company he helped found in 2010.
McKelvey was one of the few remaining executives at WeWork following its failed attempt to go public and bailout by SoftBank. His departure comes at a time when the company is wrestling with a painful turnaround.
“After 10 years, I’ve made one of the most difficult decisions of my life – one that I’m not even sure has sunk in just yet,” he said on Instagram Friday. “While it’s hard to leave, and I know there is a lot more work to be done, I could only make this decision knowing the company and our people are in good hands.
A former architect, McKelvey co-founded WeWork with Adam and Rebekah Neumann in Soho in 2010. Of WeWork’s original executives, only Jen Berrent, the company’s chief legal officer, is still at the company. In his letter, McKelvey, who served as chief culture officer, thanked WeWork staff for allowing him to turn his “daydream into my day job.”
In the post, he acknowledged the recent death of George Floyd, a black man in Minneapolis, whose killing sparked national protests over racism and police brutality. “The time is now to commit to changing ourselves, our systems, and our institutions,” he wrote.
Until last year, WeWork grew at an astounding pace, becoming New York City’s biggest tenant in 2018. Fueled by billions of dollars in venture capital, from investors including SoftBank, it was valued at $47 billion before a botched IPO revealed massive losses and questionable corporate governance. Its valuation has still fallen to an estimated $2.9 billion.
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In recent months, the firm has slashed costs under Sandeep Mathrani, a real estate veteran who took over as chief executive in February. Mathrani, who has said WeWork could be profitable by 2021, recently said WeWork may exit one in five leases. As of March, the company had 828 locations. It recently downsized its footprint in Hong Kong by 20 percent.
In a statement, Mathrani praised McKelvey’s “indelible mark” on the company. Marcelo Claure, CEO of Softbank Group International and WeWork’s executive chairman, called McKelvey a colleague and “true friend.”
“The night before I took on the role of Executive Chairman of WeWork, Miguel and I stayed up past midnight talking about the culture of WeWork” Claure said in a statement. “Just looking at our thousands of employees and more than 600,000 members around the world is a testament to the true power and value of what Miguel has helped to build.”
WeWork and SoftBank were struck by a class action lawsuit this week after investors claimed the office company’s executives overhyped the business plan to sell stock. Neumann has also sued SoftBank for pulling out of a $3 billion tender offer.
Earlier this week, WeWork’s head of real estate for the U.S. and Canada left the company. Aaron Ellison, who joined the company after a decade at JLL, was a holdout from Neumann’s days.
— With reporting by Rich Bockmann
Write to E.B. Solomont at eb@therealdeal.com