WeWork CEO Tolley steps down as company emerges from bankruptcy Reuters

(Reuters) – WeWork CEO David Tolley stepped down after the flexible workspace provider emerged from bankruptcy on Tuesday, beginning a month-long restructuring process that included changing strategy and leaving several locations.

The company has named commercial real estate veteran John Santora as its new chief executive. Most recently, he served as president of Tri-State at global consulting firm Cushman & Wakefield (NYSE:).

WeWork, once the most valuable U.S. startup, was growing at a breakneck pace, but before filing for bankruptcy protection in November 2023, it suffered huge losses due to expensive leases and a sharp decline in demand caused by the pandemic.

Late last month, WeWork received approval from a U.S. bankruptcy judge for a restructuring plan that allowed it to eliminate $4 billion in debt and inject capital into a group of lenders and real estate technology company Yardi Systems.

Tolley joined WeWork in February 2023 as a board member. He became CEO in October, leading the company through a tumultuous period that saw major operational and financial changes.

During his tenure, WeWork significantly reduced its real estate portfolio, renegotiated more than 190 leases, exited more than 170 underperforming locations, and reduced annual rent and lease costs by more than $800 million.

It also secured $400 million in new equity capital to support its future growth while reducing costs by more than 30%.

The startup was one of the biggest bets of SoftBank Group (TYO:), which owned about 71% of the shares last November, even though it has paid off most of its investments over the years. He is to retain a minority share in the company due to the loans granted.

WeWork rejected a $650 million offer from co-founder and former owner Adam Neumann in April, saying its proposal didn’t offer a high enough price to convince lenders.

The embattled company estimated its post-bankruptcy equity at about $750 million, a far cry from the $47 billion valuation it received in 2019.