WEBVTT - WeWork Part 7: In the End, There Was Adam 0:00:00.160 --> 0:00:03.440 Marine. Jensko was a we Work customer in Dallas. She 0:00:03.520 --> 0:00:06.520 worked in sales for a software company, and when she 0:00:06.640 --> 0:00:08.920 was at her we Work office, Maureen liked to work 0:00:08.920 --> 0:00:12.119 in the phone booths. These are small, padded rooms that 0:00:12.160 --> 0:00:14.600 you can step inside to take phone calls and not 0:00:14.640 --> 0:00:17.439 bother your neighbors. I came into work one day, I 0:00:17.520 --> 0:00:20.240 used opened up my computer and up pops an article 0:00:20.440 --> 0:00:24.600 about how there's formalde hyde in the we Work phone booths, 0:00:24.640 --> 0:00:28.960 which I spent upwards this three hours every day. In 0:00:30.000 --> 0:00:33.640 formalde hyde is really bad for you. It's a known carcinogen, 0:00:34.120 --> 0:00:37.720 and it's sometimes used in building materials, especially in glue. 0:00:38.280 --> 0:00:40.680 In this case, it was in we Works phone booths 0:00:40.720 --> 0:00:43.960 where Maureen sat for hours a day breathing in fumes 0:00:43.960 --> 0:00:47.440 that were possibly toxic. It was extra scary because I 0:00:47.520 --> 0:00:49.960 was eighteen weeks pregnant at this time, my first child. 0:00:50.720 --> 0:00:53.239 I mean a normal person would be concerned about that, 0:00:53.320 --> 0:00:57.320 let alone so on pregnant. We Work staff had printed 0:00:57.320 --> 0:01:00.600 out signs and taped them on the booths. Caution not used. 0:01:00.640 --> 0:01:03.040 We have been made aware that this phone boose doesn't 0:01:03.080 --> 0:01:05.800 meet our safety standards due to a defect caused by 0:01:05.800 --> 0:01:11.679 the manufacturer. Maureen was understandably freaked out. My first thoughts were, 0:01:11.880 --> 0:01:14.920 is there something wrong with my baby? And the thought 0:01:15.040 --> 0:01:18.120 of me putting her through that for three hours a 0:01:18.200 --> 0:01:21.800 day just tore me apart. She and her co workers 0:01:21.880 --> 0:01:24.480 were already following the news about we Works business failures. 0:01:25.000 --> 0:01:27.920 It had been kind of entertaining to watch until this 0:01:28.000 --> 0:01:33.160 newest development. I think it turned from joking of what happened, 0:01:33.160 --> 0:01:35.840 like what's going to happen next, to like, Okay, are 0:01:35.880 --> 0:01:38.880 you guys serious? Like this is this is not a 0:01:38.959 --> 0:01:41.880 joke anymore. This is, you know, kind of a serious issue. 0:01:41.920 --> 0:01:44.760 It's not like running out of cold brew, you know, 0:01:45.319 --> 0:01:49.760 this is, you know, potentially deadly. We Work said it 0:01:49.840 --> 0:01:52.800 removed more than two thousand phone boots, but they were 0:01:52.800 --> 0:01:56.280 also criticized for not acting sooner. I wrote a story 0:01:56.320 --> 0:01:58.840 at the time that said customers had noticed a weird 0:01:59.000 --> 0:02:02.760 smell before we were closed off the phone booths, but 0:02:02.800 --> 0:02:04.680 we Work told us in a statement that they moved 0:02:04.720 --> 0:02:09.000 as quickly as they could. In the fall of it 0:02:09.080 --> 0:02:12.200 felt like we Work was cursed. Every week there was 0:02:12.240 --> 0:02:15.720 more bad news. The I p O flopped, the CEO 0:02:15.880 --> 0:02:21.079 Adam Newman, resigned. They were potentially poisoning their customers. One 0:02:21.080 --> 0:02:23.720 of my colleagues even joked that We Work was having 0:02:23.800 --> 0:02:26.600 such a stretch of bad luck that maybe Adam had 0:02:26.680 --> 0:02:31.760 disturbed a mummy's tomb. You're listening to Foundering this week. 0:02:31.840 --> 0:02:34.120 In our final episode, we'll take a look at We 0:02:34.200 --> 0:02:39.040 Work after Adam, layoffs, lawsuits, and a pandemic that has 0:02:39.080 --> 0:02:41.640 completely derailed what it means to work in an office. 0:02:42.240 --> 0:02:45.400 Will also delve into Adam Newman's motivations and hear from 0:02:45.440 --> 0:02:49.679 people who knew him well. Once again, we've asked representatives 0:02:49.680 --> 0:02:52.880 for WE Work and Adam Newman for Common Adam spokesman 0:02:52.919 --> 0:02:55.119 didn't want to give us a statement, but you'll hear 0:02:55.160 --> 0:02:59.560 we Works comments throughout. So in the last episode, we 0:02:59.639 --> 0:03:03.239 talked about how when Adam left We Work, he negotiated 0:03:03.280 --> 0:03:07.360 a very very generous exit package with soft Maake. He 0:03:07.440 --> 0:03:11.560 was set to walk away with more than a billion dollars. Meanwhile, 0:03:11.919 --> 0:03:16.000 his employees, who were still dragging themselves to work every day, 0:03:16.240 --> 0:03:19.280 learned that thousands of them would be losing their jobs. 0:03:19.960 --> 0:03:22.880 When it was clearer that layoffs were coming, it just 0:03:23.040 --> 0:03:27.720 became this like dark cloud hanging over everybody. It was 0:03:27.760 --> 0:03:32.560 something that sort of paralyzed the whole company. That's Andrew Human, 0:03:32.880 --> 0:03:35.720 a former WE Were employee based in New York. He 0:03:35.800 --> 0:03:39.200 said that the impending layoffs killed morale inside the company. 0:03:39.240 --> 0:03:43.240 Everybody was just spending all day dreading what was coming 0:03:43.400 --> 0:03:45.840 and gossiping about who they thought was going to be 0:03:45.960 --> 0:03:49.960 cut first, and you know, keeping up to the minute, uh, 0:03:50.000 --> 0:03:53.200 you know, updates on slack as people found out new information. 0:03:53.800 --> 0:03:59.600 People were just nervous and demotivated and you know, disappointed 0:03:59.600 --> 0:04:02.720 by the old thing. And it just was it was 0:04:02.760 --> 0:04:05.960 really hard to do any work. And here's another we 0:04:06.040 --> 0:04:08.960 Work employee I spoke to. She asked not to be 0:04:09.040 --> 0:04:11.320 named in the show, but this is her real voice. 0:04:11.880 --> 0:04:15.640 No one wants to work in this Like basically, people 0:04:15.680 --> 0:04:19.000 are just not showing anymore to work. No one had 0:04:19.000 --> 0:04:23.080 the motivation to work. Everyone was basically waiting for the layoff. 0:04:24.279 --> 0:04:27.320 And then it came out the news that company was 0:04:27.440 --> 0:04:31.159 running out of cash, and then everyone was like, oh, 0:04:31.320 --> 0:04:34.279 are we going bankrupt or are we People are just 0:04:34.360 --> 0:04:39.159 waiting for bankruptcy and layoff for a while. We Work 0:04:39.240 --> 0:04:42.760 did seem close to bankruptcy. They narrowly avoided it when 0:04:42.760 --> 0:04:45.600 Soft Bank bailed them out. But what that means is 0:04:45.640 --> 0:04:49.280 that now this is SoftBank's company, and they laid off 0:04:49.320 --> 0:04:52.640 more than two thousand people in one round after another. 0:04:53.560 --> 0:04:57.000 The mood of the workplace was pretty seriously in decline 0:04:57.760 --> 0:05:01.440 for a place, you know, a workplace really prided itself 0:05:01.480 --> 0:05:04.719 on being this sort of like active and lively and 0:05:04.760 --> 0:05:08.640 fun and contemporary way to work. You could just feel 0:05:08.640 --> 0:05:10.840 it in the air. The degree to which people it 0:05:11.000 --> 0:05:14.520 just like wasn't as much fun anymore. People were not celebrating, 0:05:14.640 --> 0:05:18.880 people were not you know that the spirit around communal events, 0:05:18.880 --> 0:05:23.360 which were happening less anyway, was definitely dampened. Just just 0:05:23.440 --> 0:05:27.000 get out, like this is just is crashing, this is 0:05:27.080 --> 0:05:31.279 going down. Some meetings, people would not show up, like 0:05:31.680 --> 0:05:35.000 it was not normal. It was going for months, it 0:05:35.160 --> 0:05:41.039 was going for three months. Almost Eventually many of the 0:05:41.040 --> 0:05:44.400 employees just didn't want to be there anymore, Andrew ended 0:05:44.480 --> 0:05:47.039 up leaving on his own. At a certain point, a 0:05:47.040 --> 0:05:50.560 lot of people were actually like actively gunning to be 0:05:50.640 --> 0:05:53.200 laid off. Maybe they already had plans to leave and 0:05:53.200 --> 0:05:56.760 we're hoping for severance, or maybe because of everything that 0:05:56.839 --> 0:05:59.840 had happened, Yeah, please lay me off, Like I just 0:06:00.040 --> 0:06:02.320 want to leave, Like I'm done with this drama. Just 0:06:02.400 --> 0:06:06.600 too much drama. It's very hard to concentrate, is very 0:06:06.640 --> 0:06:09.320 hard to be motivated, It's very hard to be happy 0:06:09.520 --> 0:06:12.960 at work. Also not a good company, to be honest. 0:06:14.600 --> 0:06:18.039 Not everyone was so nonchalant about the layoffs. A group 0:06:18.120 --> 0:06:20.520 of we Work employees got together and wrote a public 0:06:20.640 --> 0:06:25.200 letter demanding fair severance. They wrote, we are not the 0:06:25.240 --> 0:06:28.479 Adam Newman's of this world. We are a diverse workforce 0:06:28.560 --> 0:06:31.840 with rents to pay, households to support, and children to raise. 0:06:32.600 --> 0:06:36.400 Newman departed with a one point seven billion dollar severance package. 0:06:36.920 --> 0:06:39.880 We are not asking for this level of graft. We're 0:06:39.920 --> 0:06:42.680 asking to be treated with humanity and dignity so we 0:06:42.720 --> 0:06:46.320 can continue living life while searching to make a living elsewhere. 0:06:47.160 --> 0:06:49.880 You can hear how painful it is for the employees 0:06:49.920 --> 0:06:53.680 to compare their outcomes to atoms. They called that exit 0:06:53.720 --> 0:06:57.880 package graft. A different group of employees sued WE Work, 0:06:58.200 --> 0:07:01.200 claiming the company's board hadn't fulfilled it's fiduciary duty to 0:07:01.240 --> 0:07:06.000 them as shareholders. We were called the lawsuit meritless. Keep 0:07:06.000 --> 0:07:08.320 in mind, we worked in have a great history of 0:07:08.360 --> 0:07:12.640 handling layoffs. Well, here's sethist Martinick, who joined the company 0:07:12.680 --> 0:07:15.920 after we Work bought his business. Once he was on board, 0:07:16.200 --> 0:07:19.040 he felt that the company had a bad culture around layoffs. 0:07:19.760 --> 0:07:22.119 You know, we Work for for a while was pretty 0:07:22.120 --> 0:07:24.440 brutal when people would leave the company, you know, like 0:07:24.480 --> 0:07:26.120 they would let someone go and they just like walk 0:07:26.200 --> 0:07:29.000 them out the front door. I was very vocal about 0:07:29.040 --> 0:07:30.440 it's harder we work, and I'm like, this is not right. 0:07:30.480 --> 0:07:31.960 You know, can't just walk people out the door when 0:07:32.000 --> 0:07:34.680 you let them go. You have to give them severence 0:07:34.760 --> 0:07:37.320 and be respectful and treat them with a lot of respect. 0:07:37.560 --> 0:07:40.840 And um Adam actually agreed with that and we ended 0:07:40.920 --> 0:07:43.840 up changing things. But the company would do that, and 0:07:43.880 --> 0:07:46.520 I think that would be like in Adam's blind spot. 0:07:47.160 --> 0:07:49.240 I spoke to multiple people at we Work who said 0:07:49.360 --> 0:07:51.920 the company had a history of laying off people who 0:07:51.920 --> 0:07:54.679 had been working there for a long time. They told 0:07:54.720 --> 0:07:58.960 me that we were called these terminations Mission Accomplished. The 0:07:59.040 --> 0:08:02.000 idea was that these people had been useful at some point, 0:08:02.400 --> 0:08:04.560 and we Work wanted to celebrate them for what they 0:08:04.560 --> 0:08:08.000 had done. But the name landed in a pretty tone 0:08:08.040 --> 0:08:11.600 deaf way. We Work eventually changed the name internally, but 0:08:11.680 --> 0:08:14.520 it had already spread through part of the company, and 0:08:14.560 --> 0:08:17.960 while thousands of his employees were losing their jobs, Adam 0:08:18.040 --> 0:08:21.520 left the country. He took his family and decamped to Israel, 0:08:22.160 --> 0:08:24.440 and for a while it looked like things couldn't get 0:08:24.440 --> 0:08:29.640 worse for we Work, But then came coronavirus. Curious what 0:08:29.760 --> 0:08:32.560 this means for we work now, not only financially, if 0:08:32.600 --> 0:08:34.920 we think about the long term consequences of what this 0:08:35.000 --> 0:08:38.240 coronavirus has done. We Work is known for crowding people 0:08:38.240 --> 0:08:41.640 together in one shared work space and playing together and 0:08:42.040 --> 0:08:44.080 sneezing on each other. If you will, you know what 0:08:44.120 --> 0:08:46.600 I mean. So how does this sort of change the 0:08:46.679 --> 0:08:49.520 way that people now even really think about we work? 0:08:50.320 --> 0:08:54.080 We Work started closing locations. They temporarily shut down a 0:08:54.120 --> 0:08:57.600 lot of offices in China, where lockdown orders were pretty strict, 0:08:58.400 --> 0:09:00.920 but in the US, a lot of we Work offices 0:09:00.960 --> 0:09:04.959 stayed open even under shelter and place orders. We Work 0:09:05.000 --> 0:09:07.880 said they were taking precautions. They gave us a statement 0:09:07.920 --> 0:09:11.360 saying they were cleaning the elevator buttons and countertops more often, 0:09:11.920 --> 0:09:16.640 but more controversially, they continued charging their members fees that 0:09:16.760 --> 0:09:18.960 piste off some of their customers. Who felt like they 0:09:18.960 --> 0:09:21.440 were being charged for a service they weren't going to use. 0:09:22.400 --> 0:09:25.480 I spoke to one customer named Adam Mutchler, who worked 0:09:25.480 --> 0:09:27.840 out of a WE Work in DC for years. If 0:09:27.880 --> 0:09:31.280 I didn't sign an amendment in October, I would have 0:09:31.320 --> 0:09:33.280 been on a month a month agreement and I would 0:09:33.280 --> 0:09:39.080 have canceled immediately in March. He's upset that we Work 0:09:39.160 --> 0:09:42.440 is still charging him. He would have stopped paying, except 0:09:42.520 --> 0:09:44.800 that last year he signed a new contract that locked 0:09:44.840 --> 0:09:47.800 him into a longer agreement. We Work said they stayed 0:09:47.840 --> 0:09:51.200 open because some of their customers are essential businesses, and 0:09:51.200 --> 0:09:53.760 they sent us a statement adding that they provide important 0:09:53.800 --> 0:09:57.520 services like mail handling for all their customers, essential or not. 0:09:58.480 --> 0:10:02.280 Adam Muchler was so convinced WE Work hasn't on any 0:10:02.320 --> 0:10:05.160 communication about what types of essential businesses. Who are the 0:10:05.240 --> 0:10:08.520 essential businesses. They've just had this really vague where an 0:10:08.600 --> 0:10:11.520 essential business because we create space for other essential businesses. 0:10:12.280 --> 0:10:15.960 In early June, Adam Muchler had had enough. He went 0:10:16.000 --> 0:10:18.640 into we Work one last time to take out all 0:10:18.679 --> 0:10:21.800 his stuff. This was early in the morning, and he 0:10:21.880 --> 0:10:26.160 said the place was deserted. Zero other people. A lot 0:10:26.280 --> 0:10:28.719 of the small offices had their logos peeled off to 0:10:28.760 --> 0:10:31.120 the glass. We she took as a signal that they 0:10:31.160 --> 0:10:34.800 had moved out. He was disappointed and We Work he 0:10:34.840 --> 0:10:37.559 saw this as a final push to squeeze money out 0:10:37.600 --> 0:10:39.960 of its customers. There was a point where I had 0:10:39.960 --> 0:10:42.800 a lot of love for We Work and it felt 0:10:42.800 --> 0:10:46.880 like this really like depressing breakup. I was just kind 0:10:46.880 --> 0:10:50.200 of walking away and they're not the company that I 0:10:50.240 --> 0:10:53.079 thought they were. And they've shown me through their actions. 0:10:53.920 --> 0:10:55.800 You know what their priorities, which I get you have 0:10:55.840 --> 0:10:58.080 to make money, but like you were all about community, 0:10:59.520 --> 0:11:03.240 and the duct was not attractive anymore. For years, we 0:11:03.320 --> 0:11:07.160 Work pitched the benefits of working closely next to others, excitement, 0:11:07.520 --> 0:11:12.320 new ideas, energy. Now coworking looked like a cloud of disease. 0:11:13.400 --> 0:11:16.360 In this moment, We Work wasn't recognizable to some of 0:11:16.400 --> 0:11:20.840 its longtime fans, in part because We Work wasn't we 0:11:21.000 --> 0:11:25.520 Work anymore. Soft Bank CEO Masa Yoshi Son had put 0:11:25.559 --> 0:11:28.680 all these billions of dollars into We Work, and after 0:11:28.760 --> 0:11:32.000 pushing out Adam, he was finally going to take the reins. 0:11:32.679 --> 0:11:36.360 He installed another Soft Bank executive as chairman of the company, 0:11:36.679 --> 0:11:39.720 and a real estate executive came in as the new CEO. 0:11:40.559 --> 0:11:43.120 They were running a pretty tight ship. Their goal was 0:11:43.160 --> 0:11:46.800 to turn the company around and make it profitable. That 0:11:46.920 --> 0:11:50.679 was already going to be a challenge, but now coronavirus 0:11:50.720 --> 0:11:55.199 made it seem nearly impossible. In an earnings presentation for SoftBank, 0:11:55.559 --> 0:12:04.360 Massa stood on stage and talked about their new predicament today. 0:12:02.960 --> 0:12:09.360 In my unique don't know, the situation is exceedingly difficult. 0:12:09.960 --> 0:12:14.000 Our unicorns have fallen into this sudden coronavirus ravine, but 0:12:14.200 --> 0:12:16.600 some of them will use this crisis to grow wings. 0:12:17.600 --> 0:12:21.160 In this same earnings called, Massa presented a new valuation 0:12:21.200 --> 0:12:24.400 for we Work, the lowest it had been in years. 0:12:25.280 --> 0:12:28.120 The company he had put ten billion dollars into is 0:12:28.160 --> 0:12:32.400 now worth only three billion dollars. Teddy Kramer, who had 0:12:32.400 --> 0:12:35.760 been an early we Work employee, was watching it all unfold. 0:12:36.400 --> 0:12:38.200 He had a sense that We Work was going to 0:12:38.200 --> 0:12:41.640 be hit hard by the virus. I have one word 0:12:41.640 --> 0:12:47.520 to describe how coronavirus is going to affect coworking clusterfuck Um. 0:12:47.600 --> 0:12:50.000 Nobody knows what to do. All the things they're doing, 0:12:50.080 --> 0:12:54.240 extended cleaning partitions. How do you enforce these things? Telling 0:12:54.240 --> 0:12:58.080 me to sit six ft away. I don't think anyone 0:12:58.200 --> 0:13:01.240 knows how to operate, mostly because we're getting zero guidance 0:13:01.240 --> 0:13:03.760 from the federal government. We're getting zero guidance from our 0:13:03.800 --> 0:13:06.560 state governments, We're getting zero guidance from our city governments. 0:13:06.760 --> 0:13:10.920 I am very um skeptical of anyone who says that 0:13:11.000 --> 0:13:13.480 we know how to operate a space. I don't think 0:13:13.480 --> 0:13:16.680 anybody has really done it yet. The sudden panic of 0:13:16.760 --> 0:13:20.079 coronavirus wouldn't have come at a worse time for We Work. 0:13:20.720 --> 0:13:23.440 We Work was waiting on the payout from an important deal. 0:13:24.080 --> 0:13:26.760 As part of their bailout, Soft Bank had agreed to 0:13:26.760 --> 0:13:30.319 buy three billion dollars and we Work stoff from employees 0:13:30.400 --> 0:13:33.600 and investors. This is called a tender offer, when you 0:13:33.640 --> 0:13:37.719 buy out existing shareholders. In March, the tender offer had 0:13:37.720 --> 0:13:40.720 been agreed to, but it hadn't actually come through yet. 0:13:41.679 --> 0:13:44.280 For Teddy, this was pretty high stakes. He was one 0:13:44.320 --> 0:13:46.480 of the few We Work employees who might actually get 0:13:46.480 --> 0:13:50.640 a significant payout because he joined so early. At first, 0:13:50.720 --> 0:13:52.480 he thought he might be able to cash out during 0:13:52.520 --> 0:13:55.120 the I p O, and when that sputtered out, the 0:13:55.200 --> 0:13:58.080 tender offer gave him some new hope. I have no 0:13:58.240 --> 0:14:00.000 belief in the long term prospects. I just want to 0:14:00.000 --> 0:14:01.959 get out as quickly as I can. The I p 0:14:02.080 --> 0:14:05.200 O fails, I go, look, this isn't great. I now 0:14:05.280 --> 0:14:06.840 have to sit on this. What's going to happen? And 0:14:06.880 --> 0:14:09.240 then the tender comes through. You know, I was I 0:14:09.280 --> 0:14:11.959 was intending to recee between a hundred and three thousand 0:14:11.960 --> 0:14:15.400 dollars from the tender and under the terms of the agreement, 0:14:15.640 --> 0:14:18.600 the tender offer was supposed to be done by April one. 0:14:19.040 --> 0:14:22.200 So for months we were employees thought that okay, they 0:14:22.280 --> 0:14:25.600 might still get some money out of their stock. They 0:14:25.640 --> 0:14:30.400 waited and kept waiting, and nothing was really happening. Every 0:14:30.440 --> 0:14:32.680 once in a while they'd get an investor update letter, 0:14:32.840 --> 0:14:37.320 but without a solid plan. Then in March, just as 0:14:37.360 --> 0:14:39.720 cities across the US were shutting down to prevent the 0:14:39.800 --> 0:14:43.160 spread of the virus, Teddy and all the other shareholders 0:14:43.200 --> 0:14:47.600 got a letter and it made him really nervous. Great, wonderful, 0:14:47.640 --> 0:14:49.680 I'm getting a note from them. I'm sure it's great news. 0:14:49.760 --> 0:14:51.920 I opened it up and I apparentially much see this 0:14:51.960 --> 0:14:54.680 cover your ask one to two page letters saying it's 0:14:54.760 --> 0:14:57.400 essentially that we work has not met the terms in 0:14:57.520 --> 0:14:59.920 order for the tender offer to complete. We are fully 0:15:00.120 --> 0:15:03.320 confident that these terms will be met within the next 0:15:03.320 --> 0:15:04.920 two weeks, but we just want to let you know 0:15:05.000 --> 0:15:07.920 that we can back out. And it was like, oh great, 0:15:08.760 --> 0:15:12.040 So Teddy knew how to read between the lines. This 0:15:12.280 --> 0:15:15.680 was a bad sign. So uh. Once I got the 0:15:15.680 --> 0:15:18.880 notice in mid March, Um, I looked at it, and 0:15:18.880 --> 0:15:21.080 I mean he said, Oh, we're fucked. This isn't this 0:15:21.120 --> 0:15:24.040 isn't happening, Um and lo and behold. Two weeks later, 0:15:24.360 --> 0:15:26.600 on April one, the day they were supposed to pay out, 0:15:26.960 --> 0:15:31.440 the order was canceled. My fears came true. What do 0:15:31.480 --> 0:15:33.400 I do you know? I was relying on this money 0:15:33.440 --> 0:15:35.440 to keep me afloat like a lot of other people. 0:15:36.120 --> 0:15:38.360 When soft Bing backed out of the deal. There was 0:15:38.440 --> 0:15:41.680 one person who had the most money at stake, Adam Newman. 0:15:42.280 --> 0:15:44.480 He was supposed to be able to sell close to 0:15:44.640 --> 0:15:48.160 a billion dollars in stock. It was like Masa had 0:15:48.200 --> 0:15:51.120 snatched the check right out of Adam's fingers, saying, ha, 0:15:51.800 --> 0:15:56.280 just kidding. So a few weeks later, Adam sued soft Being. 0:15:56.960 --> 0:15:59.960 He alleged that Softing had unfairly pulled out of the deal. 0:16:00.760 --> 0:16:03.760 Soft Bank said they were totally justified and not going 0:16:03.800 --> 0:16:06.560 through with the tender because we Work hadn't met all 0:16:06.600 --> 0:16:11.480 these criteria. For one, soft Bank sited some ongoing investigations 0:16:11.480 --> 0:16:15.840 into we Work from various regulators, attorneys General, the SEC, 0:16:16.360 --> 0:16:20.120 and others. Soft Bank's Vision fund has filed a motion 0:16:20.160 --> 0:16:24.520 to dismiss. So just when you thought he was out, 0:16:25.080 --> 0:16:28.720 Adam Newman came roaring back in and he's locked in 0:16:28.840 --> 0:16:33.280 another battle with Masa, this time about getting his billion dollars. 0:16:33.840 --> 0:16:38.840 It's like Alien versus Predator, the sequel. But We Worked 0:16:38.880 --> 0:16:42.360 employees were out of luck. They just sat back and 0:16:42.400 --> 0:16:46.360 watched the stock plummet and value. Here's Carl Pierre, who 0:16:46.440 --> 0:16:48.320 used to run the community team for We Work in 0:16:48.400 --> 0:16:50.880 d C. The side piers were a lot of people 0:16:51.000 --> 0:16:53.880 that we were holding on to a lot of options, 0:16:53.880 --> 0:16:56.360 thinking they were gonna become homeowners. Won the Company of 0:16:56.360 --> 0:16:59.400 Republic who were getting ready to buy cars, getting ready 0:16:59.440 --> 0:17:03.400 to possibly even retires start their own company, and all 0:17:03.400 --> 0:17:05.520 those gyms are dashed in the course of a couple 0:17:05.560 --> 0:17:10.280 of weeks, you know. Bummer. Carl says he even watched 0:17:10.320 --> 0:17:13.440 colleagues turned down other offers because they thought they might 0:17:13.480 --> 0:17:16.480 get rich from we work. I had like two guys 0:17:16.480 --> 0:17:18.840 I know, um, do you know? They got job offers 0:17:18.880 --> 0:17:20.840 some other places, and I talked to them about it, 0:17:20.880 --> 0:17:22.800 and they refused both offers, and they were like, no, 0:17:22.960 --> 0:17:25.040 we're gonna stick with this, Like it's gonna we're so 0:17:25.119 --> 0:17:27.120 much money. Man's like, don't You're gonna be a millionaire. 0:17:28.160 --> 0:17:32.760 I've heard stories of other employees making similar miscalculations. One 0:17:32.800 --> 0:17:35.880 former employee told me they bought a house thinking they'd 0:17:35.920 --> 0:17:37.840 be able to pay it off by selling their shares. 0:17:38.520 --> 0:17:41.000 Another said they took out a loan right before the 0:17:41.040 --> 0:17:43.359 I p O so they could buy their stock early 0:17:43.440 --> 0:17:46.119 and save on taxes down the road. Who once the 0:17:46.119 --> 0:17:48.560 I p O was canceled, they were stuck with a 0:17:48.680 --> 0:17:53.600 six figure tax bill. These employees felt financially screwed, but 0:17:53.680 --> 0:17:58.359 their disappointment went beyond that. They were hurt. I asked 0:17:58.480 --> 0:18:02.320 Dave Fanno, who's a former work executive. He said that 0:18:02.359 --> 0:18:05.919 the promise of equity made employees feel like owners, but 0:18:06.000 --> 0:18:10.399 they didn't have the same rights as actual investors. Equity 0:18:10.440 --> 0:18:17.240 continues to be used as a mechanism to create a 0:18:17.280 --> 0:18:19.800 sense of ownership, and I kind of use ownership and 0:18:19.840 --> 0:18:22.800 air quotes. It's emotional, it's not practical. They don't have 0:18:23.440 --> 0:18:26.120 the information rights and investors too, they don't really know 0:18:26.720 --> 0:18:29.119 the profitability, they don't really know the cash burn of 0:18:29.119 --> 0:18:33.480 the company. Dave said employees were also blinded by famous 0:18:33.480 --> 0:18:36.040 stories of some early start up employees who got rich 0:18:36.119 --> 0:18:39.760 from their stock because they're just thinking about, you know, 0:18:39.800 --> 0:18:42.520 those successful stories that they hear of those early employees 0:18:42.520 --> 0:18:46.159 getting a ton of you know, some some big liquidity 0:18:46.200 --> 0:18:49.960 event and and life changing amounts of money. And that's 0:18:50.000 --> 0:18:54.320 not to say those aren't true, but I think it's 0:18:54.359 --> 0:18:58.760 important to state that those are the minority in terms 0:18:58.800 --> 0:19:01.000 of the total number of people that have gotten equity 0:19:01.080 --> 0:19:04.680 relative to those that have had real pay days. Dave 0:19:04.760 --> 0:19:08.720 says he understands that some employees feel tricked, almost betrayed 0:19:08.760 --> 0:19:12.080 by their own employer. That's tough for people to navigate. 0:19:13.440 --> 0:19:18.080 They're probably remorseful, they're angry, they wish they would have 0:19:18.080 --> 0:19:22.480 had more information. And this feeling of betrayal was compounded 0:19:22.600 --> 0:19:26.200 by we works inspiring mission, which Dave says the company 0:19:26.320 --> 0:19:29.280 used to get employees bought in. I think it went 0:19:29.280 --> 0:19:32.720 a really long way. You know, you'd often hear things 0:19:32.760 --> 0:19:35.640 like it's a really great mission. It's a really it's 0:19:35.640 --> 0:19:37.520 a mission that can be a part of you know, 0:19:37.640 --> 0:19:39.600 why are you here? I really believe in the mission. 0:19:40.440 --> 0:19:44.560 That mission really meant something too WE Works employees. Here's 0:19:44.560 --> 0:19:48.760 Cody Quinn, a former executive assistant. They made people feel 0:19:48.800 --> 0:19:52.960 like they were like, then you're part of this huge 0:19:53.080 --> 0:19:56.720 thing that's going to change lives. And they were really 0:19:56.720 --> 0:20:00.399 good at sending that message that people really eiaved it. 0:20:00.480 --> 0:20:04.880 I mean I really believed it, Like dancing and fist 0:20:04.880 --> 0:20:09.000 pumping during an orientation, like they really got people to 0:20:09.119 --> 0:20:11.560 believe in what they were saying. Adam was like just 0:20:11.600 --> 0:20:14.399 a big lie to you know, and I feel I 0:20:14.400 --> 0:20:17.960 can't imagine how those people are feeling. Former employees were 0:20:18.000 --> 0:20:21.240 mad because they felt lied to by WE Works messaging, 0:20:22.040 --> 0:20:27.920 we over me Better Together authenticity, especially after they learned 0:20:27.920 --> 0:20:31.960 about the conflicts of interest, the huge payout, Adam leaving 0:20:31.960 --> 0:20:37.040 the country. In retrospect, Adam's old WE Work slogans felt hollow. 0:20:37.800 --> 0:20:41.680 Here's Cody again. If I could ask Adam one question, 0:20:42.560 --> 0:20:45.520 did you really believe all that bullshit that you told us? 0:20:45.960 --> 0:20:49.080 Did you ever really believe it? Did you ever really 0:20:49.240 --> 0:20:53.800 believe that you were changing the world. Did you ever 0:20:53.880 --> 0:20:57.119 really believe that you were elevating the world's consciousness or 0:20:57.280 --> 0:20:59.840 was it really all for that parachute you ended up 0:20:59.840 --> 0:21:03.879 with anyway, Remember, others had told me they thought Adam 0:21:03.960 --> 0:21:07.600 was manipulative and savvy, that he knew exactly what to 0:21:07.640 --> 0:21:10.199 say to get people to agree with him, that he 0:21:10.280 --> 0:21:12.639 was so charming that it was hard to know whether 0:21:12.640 --> 0:21:16.560 he believed something or not. It was hard for employees 0:21:16.600 --> 0:21:19.720 like Cody to trust that Adam had been genuine to 0:21:19.840 --> 0:21:24.359 her and to others, his actions undercut his words. Here's 0:21:24.400 --> 0:21:27.280 Andrew again. We were was sort of a dream. It 0:21:27.359 --> 0:21:30.720 was really like, it was really exciting to me. And 0:21:30.760 --> 0:21:35.480 to have that dream dashed was, you know, pretty devastating. 0:21:35.840 --> 0:21:41.560 And when Adam, you know, after the fact, you know, 0:21:41.640 --> 0:21:44.680 takes his money and runs off to Israel, it just 0:21:44.920 --> 0:21:47.359 causes you to question the whole thing, like was it 0:21:47.480 --> 0:21:51.479 ever real? Was this always the plan in the first place? 0:21:52.119 --> 0:21:55.960 And it just sort of poisons everything that felt positive 0:21:55.960 --> 0:21:59.800 about that this message that we were sold, I wasn't 0:22:00.200 --> 0:22:02.240 just a way to get some money out of the world, 0:22:02.720 --> 0:22:06.920 Like maybe it wasn't. I don't know to this day. 0:22:06.920 --> 0:22:09.840 I suspect it's probably somewhere in between. I think that 0:22:10.480 --> 0:22:15.840 you know, he's both an idealist and a realist, and 0:22:16.280 --> 0:22:19.040 you know, really believed it at the beginning and also 0:22:19.600 --> 0:22:23.280 took some pretty selfish evasive action when he saw the 0:22:23.320 --> 0:22:28.120 writing on the wall. There was something about Adam though 0:22:28.680 --> 0:22:31.200 a lot of people told me about this. They'd say 0:22:31.240 --> 0:22:34.600 that he seemed to have so much conviction and enthusiasm 0:22:34.640 --> 0:22:37.399 and energy for what he was doing, they felt it 0:22:37.520 --> 0:22:43.440 just couldn't be a sustained artifice. There's something about Adam's 0:22:43.560 --> 0:22:46.560 charisma and magnetism. I'm sure you've heard it from everyone 0:22:46.600 --> 0:22:49.199 you've talked to, Like, there's a reason why he was 0:22:49.320 --> 0:22:51.920 as successful as he was, and it's because he just 0:22:52.720 --> 0:22:56.520 radiates this energy and this passion and this excitement about 0:22:56.600 --> 0:22:59.719 what he's doing. He's a he's a zealot, and so 0:22:59.760 --> 0:23:03.640 it's hard not to believe that that's genuine. And recently 0:23:03.680 --> 0:23:06.240 I had a conversation with a former we worked executive 0:23:06.600 --> 0:23:10.040 who had some great insight into Adam's beliefs. He asked 0:23:10.080 --> 0:23:12.560 for anonymity, so we had someone else read his words 0:23:12.600 --> 0:23:16.399 out loud. He felt that Adam knew exactly how to 0:23:16.520 --> 0:23:20.840