Nov 6, 2019

SoftBank chairman Masa Son admits poor judgment over WeWork

Photo Illustration: Eniola Odetunde. Photo via Yoshikazu Tsuno/Getty Images

SoftBank’s second Vision Fund “is going to be launched as scheduled” and be roughly the same size as the first, chairman Masayoshi Son said on Wednesday during the Japanese conglomerate’s quarterly earnings, although he declined to share more details.

Why it matters: That’s in spite of the storm of challenges it’s currently weathering, including rumored fundraising woes and its biggest problem child, WeWork.

And speaking of WeWork…. Son’s story is that we’ve all been thinking about this cash lifeline wrong: Because $1.5 billion was already promised for April 2020 (along with $8 billion in a tender and debt), SoftBank is just giving WeWork the money six months earlier, and at a tenth of the cost per share. It’s really a great deal, he argued!

  • Nevertheless, SoftBank Group posted a $6.5 billion loss for the quarter — its first in 14 years. Of that, $4.6 billion was tied to WeWork (much of the rest was from Uber). The Vision Fund posted an $8.9 billion operating loss, though it’s still in the black, for now.
  • Son admitted that he made some poor judgments when it came to assessing WeWork as an investment, including in giving it a valuation of $47 billion.
  • But he also took several opportunities to blame WeWork co-founder and ex-CEO Adam Neumann for the various troubles, given his outsized control over the company and its board.

Yes, but: SoftBank had two seats on WeWork’s board and has been involved since 2017 — so it’s hard to believe that SoftBank was as blindsided as Son wants us to believe. Likely more accurate is Son’s admission that, in many cases, he "turned a blind eye, especially when it comes to governance.”

Go deeper: The complicated future of SoftBank Vision Fund

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WeWork to lay off 2,400 employees

Illustration: Sarah Grillo/Axios

WeWork is laying off 2,400 employees as a cost-cutting measure, CNBC reports.

"The process began weeks ago in regions around the world and continued this week in the U.S. This workforce reduction affects approximately 2,400 employees globally, who will receive severance, continued benefits, and other forms of assistance to aid in their career transition. These are incredibly talented professionals and we are grateful for the important roles they have played in building WeWork over the last decade."
— A spokesperson told CNBC
Go deeperArrowNov 21, 2019

T-Mobile's CEO could take over WeWork

John Legere, T-Mobile CEO. Photo: Alex Wong/Getty Images

T-Mobile CEO John Legere is in talks to take over the top job at WeWork after the departure of co-founder Adam Neumann, the Wall Street Journal reported.

But, but, but: CNBC later reported that "a source close to SoftBank confirmed Legere is one of many candidates being considered for the role, but he’s not the leading candidate."

Go deeperArrowNov 12, 2019

NYT: WeWork to lay off thousands of workers

Illustration: Aïda Amer/Axios

WeWork is set to lay off at least 4,000 employees as early as next week as the company grapples with major losses that have threatened its very existence, the New York Times reported Sunday evening.

Details: About a third of the 12,500 people that WeWork employed across its global operation at the end of June would be impacted by the layoffs, NYT notes, citing two people with knowledge of the matter. One source placed the figure as high as 5,000–6,000.

Go deeperArrowNov 18, 2019