On May 9th, at an all-hands meeting WeWork CEO Adam Neumann noted a shift away from the startup’s previously cost-conscious modus operandi to a “spending culture”. “We did not use to be this way,” he said in the video while pacing across the front of a room packed with employees. “We used to fight for every dollar. We did not spend.”
Bloomberg reported in addition to quotes from the all-hands meeting, documents they obtained showing the company’s cut in forecasts based on reports compiled back in April of this year.
A process Neumann calls “managing the nickle” was in full force when he cancelled a catering order for bagels, salmon, eggs and yogurt typically served at executive meetings on Mondays. Saving an estimated $350 a week, he used the breakfast as an example of costly waste: “I want to start receiving notes: ‘Lights are on at 2 o’clock. This is wasting money. This is wasting money. This is not smart. I don’t accept this. This is my company. I have equity here. I don’t want to be wasteful.’”
After raising more than a billion dollars, documents show that WeWork expects to end 2016 with $15 million in cash on hand, in addition to all of its cash from its most recent fundraising round and $152 million in security deposits from members.
“If we don’t take care right now of our bottom line, in opex and in capex, and of our top line in sales and community management, over our churn, over our member experience, and every other person here, if we don’t take care of the basics, as a group, we’re not going to get to enjoy as much — we’ll still — I promise everyone we’re still going to do well, but not as well as we could,” Neumann said at the same meeting. “What scares me is in 10 years to look back and say we could have done more. We could have made a bigger difference. Because that’s painful. ‘Cause time is the only thing you don’t get back.”