Financial news

Maurice Lévy prepares for daunting task in new role at WeWork

By  | 

Via Financial Times

Maurice Lévy, the Publicis chairman named WeWork’s interim chief marketing officer, said the shared office company faced a daunting challenge but that he expected to spend only a few months in the role.

“To be extremely honest with you I rejected the idea at first,” Mr Lévy told the Financial Times of the invitation from Marcelo Claure, the former Sprint chief executive brought in to chair WeWork by its largest shareholder, SoftBank.

“It would have been much better that he goes for a young CMO and communications director but there is an emergency situation where there is a need to help for a few weeks or months,” the 77-year-old said.

Describing the turnround effort as an “interesting and fun” challenge, he said his starting point would be to contain the damage done to the WeWork brand, stem “the flow of bad news” and refocus efforts on the core business.

“We have the right strategy, the right people and should reap the fruits quite quickly,” he said. 

Publicis is Sprint’s longtime advertising agency and Mr Claure and Mr Lévy have worked closely together but the appointment of one of the ad industry’s most senior executives baffled some WeWork staff, who believe its problems stem more from a business model that has yet to show a path to profit than from branding shortcomings.

Bringing in Publicis and subsidiaries such as Kekst CNC, the communications agency, also risks further demoralising WeWork employees who survived cuts that will cost the jobs of 2,400 people in its core business, outsource the positions of 1,000 cleaners and put up for sale non-core ventures employing another 1,000.

READ ALSO  IMF criticised over bailouts for central Africa’s petrostates

WeWork announced on Friday that it was repricing share options to try to retain staff whose incentives were issued before the company’s valuation plunged from $47bn in January to below $10bn.

It pulled a planned initial public offering in September that could have handed more than $200m in fees to Wall Street banks.

The company has continued to pay fees to a host of advisers since then, even after needing a rescue financing package from SoftBank to save it from burning through the remainder of the cash it raised in the private market.

In a statement on Friday night confirming Mr Lévy’s appointment, WeWork also said it was introducing a new measure of adjusted profitability that excludes the cost of stock-based payments to consultants.

The announcement came as Mr Claure said WeWork would take on fewer long-term leases, ditching a business model that many industry analysts have questioned in all but a dozen or so top cities in favour of lower-risk property management deals with landlords.

Mr Lévy said he would stay at WeWork for “a maximum of a few months”, and would look to recruit a new marketing team to take over when he leaves. 

Mr Claure is understood to be keen to reposition a brand that had claimed to be “elevating the world’s consciousness” as an aspirational provider of upmarket workspaces.

Publicis is expected to look to rebuild WeWork’s credibility with landlords and prospective members by touting its value proposition rather than the lofty mission promoted by co-founders Adam and Rebekah Neumann before their fall from power.

“This is a story of space as a service and . . . transforming the way people are working,” Mr Lévy told the FT. 

READ ALSO  What a European ‘carbon border tax’ might look like

Joining WeWork was “not without risk”, he conceded, “but, at the core, the business is not damaged. The mistakes have been at the fringes.”

Mr Lévy made his name at Publicis almost half a century ago by running into a burning office building to rescue the company’s records.

Citing his subsequent experience with corporate crises from Renault to Fiat, he said the task at WeWork was “huge but it is achievable”.

Print Friendly, PDF & Email

Hold dit netværk orienteret