Telecom veteran is among the potential candidates being
considered for post
By Sarah Krouse and Maureen Farrell
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (November 12, 2019).
WeWork is in discussions with T-Mobile US Inc. Chief Executive
John Legere to take over leadership of the troubled office-sharing
startup, according to people familiar with the matter.
WeWork's parent, formally known as We Co., is searching for a
CEO who can stabilize the company following the erratic tenure of
its co-founder Adam Neumann. After WeWork's failed attempt at an
initial public offering, SoftBank Group Corp. bought a majority
stake in the company last month in a bailout, severing most ties
with Mr. Neumann.
The startup is looking for a new leader who could join as soon
as January, some of the people said. There is no guarantee that Mr.
Legere, who stands to receive a windfall if T-Mobile completes its
proposed takeover of Sprint Corp. next year, would accept the
position or that another candidate won't emerge. WeWork is also
talking to other potential candidates, one of the people said.
Like Mr. Neumann, Mr. Legere is known as an unconventional
executive. The 61-year-old has spent the past six years running
T-Mobile with a pugnacious style, trashing his rivals on Twitter as
"Dumb and Dumber," using foul language and dressing in the
company's signature magenta. He has turned around T-Mobile's
operations, luring millions of cellphone customers from larger
players and initiating the pending takeover of Sprint.
Two WeWork executives, Artie Minson and Sebastian Gunningham,
have served as co-CEOs since September when Mr. Neumann resigned
under pressure as chief executive. SoftBank executives are seeking
to replace the duo with a high-profile candidate who they hope can
turn the company around with an eye toward potentially taking it
public in the future, the people said.
As WeWork ran dangerously low on cash, SoftBank stepped in with
nearly $10 billion to steady the company and installed one of its
own top executives, Marcelo Claure, as chairman and de facto head
of the turnaround effort. SoftBank and its Vision Fund now own
about 80% of WeWork.
When WeWork promoted Mr. Minson, the company's former finance
chief, and Mr. Gunningham, a vice chairman, it didn't designate
them interim CEOs. When asked last month at an employee town hall
whether the two men would remain, Mr. Claure remarked only that the
arrangement was unusual. It isn't known what roles, if any, they
might have should WeWork hire a new CEO.
Mr. Claure, who is chairman of Sprint, another SoftBank
portfolio company, has been analyzing WeWork's business and costs,
pledging to work four days a week at its New York headquarters. Mr.
Claure has sought help from another Sprint executive: CEO Michel
Combes has spent time at WeWork's New York office in recent weeks,
some of the people said. Mr. Claure has told people that Mr. Combes
is unlikely to become WeWork's CEO.
WeWork's parent, with revenue of $1.8 billion last year and a
recent valuation around $8 billion, is far smaller than T-Mobile,
which had revenue of more than $43 billion last year and a market
cap of nearly $70 billion.
Mr. Legere is a veteran of the telecom business, a boom-and-bust
industry in which technological changes can shift companies'
fortunes quickly. A Fitchburg, Mass., native, he worked previously
at AT&T Inc. and was chief executive of fiber-optic network
provider Global Crossing Ltd. before joining T-Mobile.
He has worked closely with Mr. Claure over the last year and a
half to secure U.S. government approval for T-Mobile's proposed $26
billion acquisition of Sprint. Both prolific Twitter users --
unusual among big-company executives -- they posted selfies riding
electric scooters and running on the National Mall as they made
their case to regulators.
But the deal hasn't been sealed. Though approved by federal
officials, it has been delayed by an antitrust suit filed by
several state attorneys general. The trial is set to start next
month. Mr. Legere said last week that the parties are discussing
how to extend the deal's deadline and didn't rule out the
possibility of renegotiating the price.
When it announced the Sprint deal, T-Mobile said Mr. Legere
would run the combined company. But executives at the time told
investors they expected the merger to close in the first half of
2019; they now say the transaction won't close until next year.
T-Mobile's share price is up nearly 240% since Mr. Legere became
CEO in September 2012, compared with a 114% gain in the S&P 500
index over that same period. Shares of T-Mobile closed 1.6% lower
Monday following The Wall Street Journal's report on his potential
departure, while Sprint shares closed down 3.3%.
T-Mobile paid Mr. Legere $66.5 million last year, and he was
eligible to receive up to $109 million if the company met certain
performance targets. When T-Mobile struck the merger deal with
Sprint, it also extended Mr. Legere's employment contract through
April 30, 2020.
Mr. Legere has cleaned up messes before. He spent a decade at
Global Crossing, leading it through a bankruptcy and to an eventual
sale in 2011.
During his time as CEO, T-Mobile grew from a struggling No. 4
U.S. wireless carrier to a strong No. 3 that routinely wins
customers from larger rivals AT&T and Verizon Communications
Inc.
T-Mobile has spent years positioning Mr. Legere's deputy, Mike
Sievert, to take on more responsibilities. He was named chief
operating officer and appointed to the board in early 2018.
T-Mobile's marketing events have increasingly featured Mr.
Sievert's voice. When the company last week unveiled a series of
consumer-friendly promises designed to win over skeptical state
officials, Messrs. Legere and Sievert shared the stage.
--Drew FitzGerald and Liz Hoffman contributed to this
article.
Write to Sarah Krouse at sarah.krouse@wsj.com and Maureen
Farrell at maureen.farrell@wsj.com
(END) Dow Jones Newswires
November 12, 2019 02:47 ET (07:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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