The Turnaround Plan
On November 22nd, Marcelo revealed WeWork’s turnaround plan.
In just a couple of months, the atmosphere among employees had shifted. Despite 2,400 layoffs the day before—representing 20% of the global workforce—there was curiosity and even a sense of cautious excitement about what was coming next. Marcelo addressed the layoffs at the start of the call, acknowledging the sadness and emphasizing that those affected were treated with dignity. I appreciated that he said this; it felt like an important gesture in a difficult moment.
The turnaround plan was built around four pillars:
- Growth
- Financials
- Ways of Working
- Clarifying Who We Are
It was refreshingly simple—a framework that focused on what we could control internally, rather than lofty ambitions of changing the world.
Growth
In late 2019, WeWork had 600,000 members across 625 locations. The goal was to double this within 12 months to 1.2 million members and 1,200 locations.
This level of growth surprised me, given the losses the company was already facing. But I think there were a few reasons for this approach: many locations were already in construction or close to it, so the costs had already been incurred. Additionally, SoftBank seemed confident in the flexible work category’s growth, WeWork’s ability to execute with additional capital, and maximizing the first-mover advantage.
Growth was a big part of the internal narrative at WeWork. Adam’s leadership had ingrained the idea that success was about increasing members and capacity at all costs. Marcelo’s challenge was to shift that narrative to focus on sustainable and profitable growth, while keeping employees engaged in the process.
Financials
In 2019, WeWork was on track to lose billions in EBITDA and burn billions more in cash. These staggering losses needed to be brought to zero—or better—by 2021 and 2022, respectively. Achieving this would require a complete transformation, touching every part of the company.
Marcelo took the time to break down the financial goals and the concepts behind them, ensuring employees understood their role in the turnaround. A key shift was treating each building as its own business, with profitability optimized on a building-by-building basis. Up to this point, reporting was primarily regional or qualitative, leaving important local nuances overlooked. This new approach required teams to focus on granular, actionable data at the ground level.
Marcelo also introduced a simple framework for measuring building performance: Member Revenue - (Rent & Tenancy Costs + Building Operating Expense).
While not revolutionary, this formula filled a critical gap in understanding. By clearly itemizing the components of building profitability, Marcelo equipped employees to identify specific opportunities for improvement. From consolidating coffee suppliers to adjusting pricing strategies, this clarity empowered teams across the organization to take meaningful action.
For many employees, this was a turning point. It wasn’t just about numbers—it was about seeing how their individual efforts connected to the larger financial goals. Marcelo’s ability to translate these high-level concepts into tangible actions brought focus and alignment at scale, driving accountability across the company.
Ways-of-Working
The third pillar of the turnaround plan focused on ways-of-working, with a particular emphasis on rebuilding trust with WeWork’s key constituents. Marcelo made it clear that regaining this trust wasn’t optional—it was essential for stabilizing operations and creating long-term value.
As a first step, Marcelo identified WeWork’s primary constituents—members, employees, landlords, investors, and partners—and explained, from their perspectives, why trust had been eroded. For members, it was the sense of uncertainty around the company’s future and their reliance on WeWork as a workspace provider. Employees, many of whom had endured layoffs and cultural upheaval, felt disillusioned and unsupported. Landlords were frustrated by unpaid rents and perceived overpromises, while investors were reeling from the failed IPO and staggering financial losses.
This was a significant shift in the company’s mindset. Previously, WeWork had viewed itself as untouchable—the darling of the global startup scene, celebrated for its ambition and meteoric rise. When the narrative shifted after Adam’s departure, WeWork positioned itself as a victim of his leadership, absolving the broader organization of responsibility. Marcelo rejected both extremes. Instead, he challenged the company to acknowledge its broader impact on others and to rebuild trust through actions, not words.
This new perspective was sobering but necessary. It forced the company to see its role in the broader ecosystem and understand that rebuilding trust required humility, transparency, and consistent effort. Marcelo emphasized that it wasn’t enough to stabilize internally. The company needed to repair relationships externally to ensure WeWork could move forward with credibility and confidence.
This pivot in mindset was a powerful reminder of the importance of accountability, both within the organization and to the external stakeholders who relied on it. By focusing on trust as a cornerstone of its ways-of-working, WeWork signaled a commitment to a more grounded and sustainable path forward.
Who We Are
The fourth part of the turnaround plan focused on clarifying who we are as a company. During the presentation, Marcelo shared that when he asked employees what WeWork was, no one could give him a straight answer. After nearly a decade in business, billions in revenue, and a peak valuation of $47 billion, this lack of self-awareness was glaring. But it wasn’t surprising. Adam’s leadership style was big on vision but often neglected the details, leaving room for interpretation—or misinterpretation. Without a clear identity, WeWork struggled to defend itself against accusations of mismanagement or align its people around a common purpose.
I remember a conversation with a friend at WeWork, an award-winning architect. He compared WeWork to an artist’s illusion: one image, but everyone sees something different. To some, WeWork was the largest network of entrepreneurs, freelancers, and professionals. To others, it was a revolutionary design house or the largest high-tech construction company. This ambiguity created excitement in the early days but later became a liability. We lacked a shared understanding of what WeWork was and what it was striving to be.
Marcelo recognized this gap and moved quickly to address it. The company launched internal and external marketing campaigns to unify its identity. These efforts aimed to make prioritization and alignment easier by ensuring everyone—employees, members, investors, and landlords—could connect with a clear and consistent vision of the company.
To anchor this effort, Marcelo introduced a new mission: “To reinvent the way people work through designed space, flexibility, and technology.”
It was a straightforward, actionable statement that gave employees something concrete to rally around.
For most of us, clarifying who we were, alongside growth, financials, and ways of working, felt like a sensible starting point. These pillars were practical and grounded, unlike the overly ambitious and often vague goals of the past. However, as Marcelo emphasized repeatedly, a plan is only as good as its execution. Aligning around this new identity was just the first step—delivering on it would be the real challenge.
Takeaways From The Turnaround Plan
- Acknowledge Difficult Moments
Marcelo’s recognition of layoffs with empathy set a tone of dignity and respect during a challenging time. - Simplify the Strategy
The turnaround plan focused on practical, actionable pillars: growth, financials, ways-of-working, and identity. - Focus on Sustainable Growth
Shifting from rapid expansion to profitable, sustainable growth redefined success for WeWork. - Data Must Drive Decisions
Treating each building as a business and focusing on granular data improved accountability and profitability. - Empower Teams Through Clarity
Simple frameworks like the building profitability formula gave employees actionable insights to drive improvement. - Trust Is Earned Through Actions
Rebuilding relationships with key stakeholders required humility, transparency, and consistent follow-through. - Acknowledge Broader Impact
Marcelo challenged WeWork to see itself in the context of its ecosystem, restoring accountability to its stakeholders. - Define Who You Are
Without a clear identity, WeWork struggled to align internally and defend itself externally. - Unify Around a Clear Mission
The new mission—“To reinvent the way people work through designed space, flexibility, and technology”—provided a rallying point for employees and stakeholders. - Execution Is Everything
A strong plan is only as good as the company’s ability to deliver on it, a message Marcelo emphasized repeatedly.