WeWork’s ongoing turnaround will continue without the leadership of chairman and CEO Sandeep Mathrani, who is leaving the flexible space provider to become a director at private equity firm Sycamore Partners.

Mathrani will exit his roles at WeWork on 26 May, the Manhattan-based company said Tuesday in a release. The former Brookfield Properties retail boss has led WeWork since February 2020, when he was brought aboard to help guide the co-working giant to profitability.

Mathrani oversaw $2.3 billion in cost cuts and a streamlining of global operations at the group founded by Adam Neumann in 2010. The profit failed to materialise, but WeWork reported consolidated revenue of $849 million, up 11 percent year-on-year, in the first quarter of 2023 as net loss narrowed by $205 million from a year earlier to reach $299 million.

“We appreciate the tremendous work Sandeep has done for WeWork over the past three years,” said Alex Clavel, CEO of key shareholder SoftBank Group International. “He successfully steered the company through the depths of the pandemic, introduced new revenue streams, and helped put WeWork on a path to profitability.”

Director Named Interim CEO

WeWork board member David Tolley has been appointed as interim CEO and will work alongside president and chief operating officer Anthony Yazbeck, the company said.

A former Blackstone partner, Tolley most recently served as chief financial officer of satellite operator Intelsat from 2019 to 2022 and joined WeWork as a director in early 2023. He also sits on the boards of infrastructure investor DigitalBridge and maritime communications provider KVH Industries.

With Mathrani’s departure, lead independent director Daniel Hurwitz will serve as chairman of the board and lead a special committee to search for a new CEO.

“We are delighted that David will lead WeWork as interim CEO and will work with Daniel and the special committee to identify Sandeep’s permanent successor,” Clavel said.

Retail Specialists

In his new role, Mathrani will lead real estate activity at Manhattan-based Sycamore Partners, a specialist in retail-related investments.

Before joining WeWork, Mathrani served as CEO of Brookfield Properties Retail following the Canadian investment giant’s 2018 acquisition of General Growth Properties, a REIT where he had served as chief executive since 2010. His earlier career included a stint as executive vice president of NYSE-listed Vornado Realty Trust.

At Sycamore, Mathrani gets his chance to make a mark with a firm that has raised $10 billion in committed capital since its founding by Stefan Kaluzny and Peter Morrow in 2011. Sycamore’s portfolio companies include office supply superstore Staples and women’s clothiers Ann Taylor and Lane Bryant.

“Sycamore Partners has an outstanding reputation for driving profitable growth across its leading retail and consumer brands,” Mathrani said in a release. “I look forward to working closely with my new colleagues as we focus on building upon the firm’s existing capabilities.”