Business

WeWork to withdraw IPO as it enters austerity mode

NEW YORK: WeWork, which replaced its controversial chief executive last week, announced on Monday that it will withdraw a plan to go public for now as it shifts into austerity mode.

The company's co-CEOs Artie Minson and Sebastian Gunningham said they decided to "postpone our initial public offering to focus on our core business, the fundamentals of which remain strong."

But they signalled that they still intend to take the company public down the road, saying: "We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future." The announcement comes six days after controversial co-founder Adam Neumann stepped down.

The company, under pressure from Wall Street to rein in costs, plans to cut thousands of jobs and to rid itself of a corporate jet obtained during Mr Neumann's tenure, according to a person familiar with the matter.

S&P last week downgraded the company and placed it on "negative" watch for possible additional downgrades, saying the outlook "captures the pivot in corporate leadership and related uncertainty around the company's future direction with respect to its operating strategies and growth plans".

The company's IPO setback is a "rare win for the public markets over shoddy governance practices", said a note from Sanford C. Bernstein, which laid out a belt-tightening plan for the company. - AFP

BUSINESS & FINANCE