(Reuters) – WeWork Chief Executive David Tolley resigned after the flexible workspace provider filed for bankruptcy on Tuesday, ending a months-long restructuring process that included a strategy update and the exit of several locations.
The company has named commercial real estate industry veteran John Santora as its new chief executive. He most recently served as Tri-State Chairman of the global real estate services firm Cushman & Wakefield (NYSE:).
WeWork, once the most valuable U.S. startup, expanded at breakneck speed but suffered huge losses due to expensive rent and a pandemic-fueled slump in demand before filing for bankruptcy protection in November 2023.
Late last month, WeWork received approval from a U.S. bankruptcy judge for a restructuring plan that allows the company to pay off $4 billion in debt and transfer its equity to a group of creditors and real estate technology company Yardi Systems.
Tolley joined WeWork in February 2023 as a board member. He became CEO in October, leading the company through a difficult period that saw major operational and financial changes.
During his tenure, WeWork sharply reduced its real estate portfolio, renegotiated more than 190 leases, exited more than 170 unprofitable properties and cut annual rental and leasing expenses by more than $800 million.
The company also raised $400 million in new equity capital to support its future growth while cutting costs by more than 30%.
The startup has become one of SoftBank’s (TYO:) Group’s biggest bets, which held about 71% of the shares last November, although it has written down most of its investment over the years. He intends to maintain a minority stake through the loans provided.
In April, WeWork rejected a $650 million offer from co-founder and former owner Adam Neumann, saying his proposal did not offer a price high enough to attract lenders.
The troubled firm valued its post-bankruptcy equity at about $750 million, a far cry from the $47 billion valuation it received in 2019.