When WeWork's directors voted on Tuesday to oust Adam Neumann as chief executive after a failed attempt to take the office-sharing startup public, Neumann cast his vote against himself, according to three people familiar with the situation.
The vote by Neumann, who remains non-executive chairman but gave up majority control of the company he co-founded, was the culmination of a stunning coup to remove him led by his biggest backer, Masayoshi Son, the billionaire CEO of SoftBank Group, the sources said.
Neumann's downfall came after WeWork's parent, We Company, spent months preparing for an initial public offering, only to have to postpone its plans last week, as estimates of its value fell by tens of billions of dollars amid investor concerns about its corporate governance under Neumann, 40, and its ability to generate a profit.
The falling estimates came as a shock to Son, who had plowed more than $10 billion into WeWork, the last investment at a $47 billion valuation, according to three people familiar with the matter. At that level, WeWork was the world's fourth-most valuable private startup, according to data firm CB Insights. By the time the IPO was pulled, estimates of WeWork's value had come down as low as $10 billion.
By last weekend, some WeWork directors started to lay the groundwork for Neumann's departure, according to a source familiar with the seven-member board's deliberations.
The notion would have been unthinkable only a few months ago, with the WeWork brand strongly tied to the flamboyant, freewheeling Israel-born entrepreneur who has said that his company's mission was to "elevate the world's consciousness."
The substance of the message to Neumann from them: "Listen, this IPO has gotten distracted by you," the source said.
Neumann decided to back the management changes because he became convinced they were in the best interest of the company, according to a person close to him. Neumann owns about a quarter of WeWork, sources have previously said, tying much of his wealth to the company. WeWork has not disclosed what percentage of the company he owns.
Neumann did not respond to calls and emails requesting an interview.
SoftBank and WeWork declined to comment.