Punch in the Mouth
WeWork’s turnaround started with hope—maybe even excitement. There was momentum, and you could feel the company shifting back on track. I still remember being tapped for a video on February 26th, 2020. In it, I said, “If we use the same drive and energy that got us to where we are today, to turn this place around, I have no doubt we will be successful.” And I meant it. We had a plan, and we were ready to execute it. But, as Mike Tyson famously said, “Everyone has a plan until they get punched in the mouth.”
A global pandemic
That punch landed in early 2020. On January 18th, the CDC reported the first confirmed case of COVID-19 in the US. By January 31st, the WHO declared the outbreak a Public Health Emergency of International Concern (PHEIC). Within weeks, the US began shutdowns, including New York City’s public school system.
For WeWork, the impact was devastating. By the end of 2020, occupancy had dropped from 75% in 2019 to 45%. For freelancers and small businesses, selling into a market that didn’t even want to leave home was next to impossible. Retention became a struggle, even with discounts and flexible terms. The natural growth pattern of small businesses—hiring new employees and scaling their teams—slowed to a crawl as they fought to survive.
Larger companies weren’t any easier to retain. Trendsetting organizations like Netflix, Google, and Facebook announced work-from-home policies early on, setting a precedent that others followed. These decisions were seen as responsible and employee-friendly, leaving little appetite for exploring long-term workspace solutions in 2020.
However, there was a silver lining. Interest in flexible workspace solutions began to grow. Companies started looking for ways to cut corporate real estate costs while employees, newly adjusted to masks and distancing, began craving social interaction. By early 2021, demand for flexible space started to return. But it was clear—it would be a long road ahead.
For freelancers and smaller companies, selling into a market that didn’t want to leave their homes was next to impossible. Retention was difficult to achieve even with discounts and flexible terms. What’s more, the natural growth pattern of small businesses adding new employees slowed as small businesses struggled through the pandemic.
For larger companies, trend-setting technology companies like Netflix, Google and Facebook, publicly announced work-from-home policies. These were widely viewed as responsible decisions to slow the spread of the disease and employee-forward. Many companies across industries adopted similar policies and it was unclear what normal would look like when the dust settles. Suffice to say, there was little appetite to explore long-term workspace through 2020.
There was, however, growing interest in flexible workspace solutions. It was a cost saving measure for companies looking to optimize their corporate real estate spend and for employees who wanted to take advantage of WFH benefits and manage their commute. By early 2021, workers had become familiar with masks and distancing, and often desired social interaction, and appetite increased for flexible space services. Thought it was going to be a long road ahead.
The pandemic was a heavy blow to WeWork’s turnaround plan.
Marcelo leaves Softbank
The second major blow to WeWork’s turnaround came in early 2022 when Marcelo resigned from SoftBank over a compensation dispute. For over a year, he had been the face of the turnaround, embodying strength, decisiveness, and a clear vision for the company. Even the most skeptical stakeholders—both internal and external—respected his leadership and trusted in his ability to steer WeWork through its most difficult challenges.
I had the privilege of participating in the Monthly Business Reviews (MBRs) during Marcelo’s tenure, and those experiences left a lasting impression on me. While I’ll never divulge the specifics of those discussions, I was routinely struck by the sheer level of care and focus demonstrated by Marcelo, Sandeep, and others. Every decision, no matter how tough, reflected their determination to do what was right for the company. Watching leaders tackle such monumental challenges with grace is something I’ll carry with me for the rest of my career. I hope to bring that same resolve and clarity when faced with my own pivotal moments.
When Marcelo departed, it left a deep void. Sandeep went into hyperdrive trying to keep the careful patchwork of turnaround strategies and goals together. He was a remarkable leader, decisive and firm. But losing a key player like Marcelo meant fewer guardrails to keep teams moving in the same direction.
The partnership between Marcelo and Sandeep, which had been both effective and uplifting, was no longer visible. Their dynamic—often characterized by lighthearted banter even in high-stakes meetings—helped boost morale and gave employees a sense that leadership was united and in control. Without that partnership, things felt heavier. The cracks in the plan became harder to ignore, and the cohesive energy that had driven the turnaround started to dissipate.
Marcelo’s departure wasn’t just a leadership loss—it was a psychological one. For many people, he carried a large part of the hope that WeWork’s comeback was possible. Without him as Chairman, that hope felt much harder to hold onto.
Shared trauma
The cumulative weight of these events took its toll. I think most people can relate to setbacks layered on setbacks—it wears you down.
The early days at WeWork were exhausting but fun. The parties and events gave us a chance to breathe. After September 2019, the work became much more adult. Conversations revolved around layoffs—sometimes multiple times a day. Which teams were next? Would bonuses be help back this time?
There was a constant undercurrent of worry. People with kids or sick family members asked for reassurance about their jobs, desperate to keep their medical insurance. Others struggled with workloads, as headcount fluctuated unpredictably—one moment you’d gain support, only to lose it the next. Even seeking internal mobility for career advancement became taboo, seen as disloyal.
This created silos—pockets of loyalty formed out of a shared desire to survive the next round of layoffs. These silos got in the way of addressing legacy issues, derailed performance reviews, and made it nearly impossible to focus on long-term goals. It wasn’t just business—it was survival.
Takeaways
- Resilience is Tested in Crises
The pandemic created unmatched challenges for the WeWork’s turnaround plan, emphasizing the need for adaptability and perseverance in leadership. - Leadership Anchors Morale
Marcelo’s departure created a leadership and psychological void, highlighting how vital strong, unified leadership is in maintaining hope and alignment. - Clarity in Strategy Drives Confidence
The pandemic’s disruption underscored the importance of clear, actionable strategies that teams can rally behind, even during unprecedented challenges. - Silos Undermine Progress
Layoffs and uncertainty created pockets of survival-driven loyalty, making it difficult to tackle systemic issues and focus on long-term goals. - Shared Adversity Builds Lessons
The cumulative weight of setbacks revealed the emotional toll of transformation efforts, leaving lasting lessons in resilience, empathy, and the human cost of business challenges.