A Microcosm of Human Society in a Startup
How WeWork paid hush money to gag a whistleblower on sexual assault, drug abuse and other allegations
When an allegation is made, it’s typically a short description of the crime and some pages of the incident and the evidence available. For the bleeding co-working space startup, it’s as thick as IKEA’s catalogue—a 50-page document outlining a series of allegations ranging from irresponsible misdemeanours to outright heinousness. Broken workplace cultures isn’t that common in startups (especially when it’s WeWork), but at this point, nothing is unsurprising anymore.
It’s not a complex affair: a former employee files a list of complaints against the company and the company comes around with hush money.
If anything, the whistleblower is two million dollars richer. Allegedly, the money came in when Neumann was trying to raise billions more from Softbank, which they eventually did for a valuation of $47 billion.
Unfortunately, now that the “swamp has been drained”, these allegations resurfaced, detailing Mark Lapidus’s and his real estate team’s antics during former CEO Adam Neumann’s leadership. Unsurprisingly, Lapidus is part of the Neumann dynasty, since he is the cousin of Rebekah Paltrow, who co-founded WeWork with her husband Neumann.
First, there’s all the substance abuse. Marijuana is normal, especially for recreational use in legalized states. Lapidus however, likes to go a bit further, going from popping Molly and Xanax to snorting crack altogether. In fact, those drugs were rampant in the lavish parties that Lapidus loved to throw, like a $36,000 table at Encore Beach Club.
Then, there’s all the sexual harassment, assault and inappropriate relationships. A male executive wanted to “have a go” with a drunk female subordinate. Bosses also slept with female colleagues—one allegation claimed that a senior manager admitted to the whistleblower that he “slept with two direct female subordinates.”.
Hell, even the whistleblower herself was sexually assaulted at one point of time.
The document also outlined a culture of discrimination, which could have been a charge of discrimination filed with the Equal Employment Opportunity Commission.
With the new leadership team under Marcelo Claure and Sandeep Mathrani, WeWork is now desperately scrambling away from debt, expenses, and a host of workplace culture problems. Maybe that might do it, but Claure likes his lavish, thousand-dollar fine dining dinners, even though he laid off thousands.
It’s a bit like human society at this point. A penchant to cover up mistakes. A belief that money can plug holes and erase crimes. A perpetual chase for the hedonic treadmill.
It’s selfishness at the maximum.
WeWork’s deep in the trenches trying to fight the balance sheet wars, but debt isn’t going to fade away with prayers and new captains of the ship. Unfortunately, things aren’t looking so well for the economy—consequently, WeWork—and WeWork might bleed dry one day. Till then, the startup should at least build an appropriate culture centred in empathy.
The reality is, without someone at the top steering the ship, winds will just blow the shit wherever it goes. Neumann’s not any better himself—even though he fired Lapidus after he knew of all the incidents in 2018—with his private jet, Maybach, cannabis on the plane…. you name it.
One can only look at the new CEO, Mathrani, and observe his moves. Although he claims to have a no-tolerance policy, no one truly knows until you smell the money. Now that Claure is here, perhaps the startup might have some hope. However, without a massive draining, the startup will be permanently stuck in broken culture limbo.
In the end, hopes of filing another IPO will just be incinerated, rather than buried.