Corporation as Cult: WeWork’s Wild Ride

In the late 70s, I worked for a consulting company in New York called Automated Concepts Inc., mostly known in the industry as ACI. The CEO was a guy named Fred Harris who was well-liked by the staff, including me. It was also common knowledge that Fred used to attend EST workshops, where he supposedly learned the skills he needed to become a successful businessman.

EST stood for Erhard Seminars Training that was a mixture of founder Werner Erhard’s ersatz Eastern religious mysticism and Dale Carnegie type lessons on how to become a “success” in business. While certainly cultish, it was by no means as bad as Scientology. Fred used to take me out to dinner from time to time, mostly to be able to chat with someone who didn’t fit the mold of the propellor-heads who worked for him.

Even as the 60s/70s radicalization was dying out, the New Age lingered on in the corporate world as the idea of leveraging economic success with spiritualism proved seductive. With some leftists like Rennie Davis jumping the radical ship, it was the perfect place for them to land. You could simultaneously “make it” and feel superior to the grubbiness of American society. After becoming a disciple of Guru Maharaj Ji, Davis created the Foundation for a New Humanity, a technology development and venture capital company specializing in new technology.

After dropping out of Reed College in 1972, Steve Jobs traveled through India in 1974 seeking enlightenment and studying Zen Buddhism. That apparently gave him the proper frame of mind to create Apple Computers. Jobs hired Rod Holt, an ex-member of the SWP, to design the circuits used in the Apple II. Holt had much more respect for Jobs than he ever had for the SWP’s cult leader. Like Fred Harris, Jobs did not seem interested in proselytizing his subordinates with Eastern religion. Religious fervor was mostly devoted to developing great new products.

I would have thought that New Age mysticism would have become passé in a world where price-tags are the common denominator. A job was just a job, not something that had to do with building a better world. Idealism had gone by the wayside long ago, marked by the decline of the revolutionary left. The DSA best expressed the spirit of the age with its top guru Bhaskar Sunkara building a magazine empire rather than living like a footloose IWW organizer.

Oddly enough, the spirit of the 1960s never died out completely but came back in a strange mutation called WeWork that convinced its young employees that “they were members of a vanguard changing the world,” as Gabriel Sherman put it in a November 21, 2019 Vanity Fair article. That kind of quasi-political fervor could only be maintained by some cult leader capable of convincing its employees that he could practically walk on water. In one of the most lurid crash-and-burn tales in the corporate world since Elizabeth Holmes’s Theranos went belly up, WeWork went from a $47 billion dollar market capitalization to only $2.9 billion in less than a year.

When my wife told me that she wanted to see the documentary on Hulu titled “WeWork: Or the Making and Breaking of a $47 Billion Unicorn,” I knew very little about the company except that it had failed big-time and that it had been in the business of renting space to free-lancers who might find its vibe preferable to sitting around in Starbucks. I never set foot in one of the WeWork buildings that at their peak had been part of a whopping total of 8.2 million square feet in Manhattan, exceeding JP Morgan Chase by nearly 3 million square feet.

Like Elizabeth Holmes, who modeled herself after Steve Jobs—black turtleneck and all—there was a megalomaniac riding the WeWork unicorn. His name was Adam Neumann, an Israeli immigrant who screwed all the young people working for him as he walked away from his company with a colossal golden parachute. Neumann’s grandiosity was something to behold. He said his aspiration was to be president of the planet Earth and that he expected his company to last for 300 years.

Before getting into his story, I should say a word or two about WeWork’s co-founder who had none of Neumann’s charisma but who sprung from the New Age hatchery. Born in 1974, Miguel McKelvey grew up in the “five-mother collective” in Eugene, Oregon, where his family started and ran a weekly newspaper called the Eugene Weekly. As chief “culture officer” of WeWork, McKelvey oversaw the vegetarian regime at WeWork. In 2018, red meat, pork or poultry were no longer served at company functions. In an interview with the NY Times, McKelvey stated, “I consider myself to be a ‘reducetarian.’ I try to consume less and be aware of the decisions I’m making. Not just food, but single-use plastics, and fossil fuels and energy.”

For his part, Adam Neumann was also into mysticism even if not exactly East Asian. He and his Jewish wife, who eventually took on McKelvey’s duties, were heavily into Kabbalah, a Hasidic system of beliefs that once counted Madonna among its devotees. On October 16, 2019, the Wall Street Journal reported:

A Kabbalah Centre teacher would come to Mr. Neumann’s office to hold sessions for top executives weekly, said people who attended these meetings. Most senior executives went at least a few times, even those who had little interest in Kabbalah. Sessions weren’t mandatory, but executives believed participation was encouraged, these people said.

The number 18, an auspicious number in Judaism and emphasized in Jewish mystical circles, often made an appearance in WeWork business decisions, according to people familiar with the matter.

Don’t get the idea, however, that Neumann was some sort of ascetic. He consumed vast quantities of tequila, even during the working day, which routinely lasted from 9:00am to 3:00am. His favorite was Don Julio 1942 that cost more than $100 per bottle. He was also a total pothead and surfboarding fanatic who used the company jet to fly him to his favorite venues.

So how did such a flake become the head of a company that was worth $47 billion at its peak? In 2008, Neumann and McKelvey were co-owners of a floor in a DUMBO (Down Under the Manhattan Bridge Overpass) building in Brooklyn, not far from Verso Books offices. They decided to turn it into an eco-friendly co-workspace called Green Desk, not much different from other co-workspaces then cropping up. From a relatively small initial expenditure, they were able to sell the space for over a million dollars that provided the seed money for WeWork.

The documentary points out that the New York real estate business is relatively stable. Once you’ve planted your flag in the industry, it is pretty difficult to crash and burn like WeWork. So what happened? It turned out that Neumann never viewed his company as a real estate business. He saw it as being much more like a technology start up like Google, Facebook or Amazon. His IT staff did develop a system to monitor how space was being used but that in itself was not what brought it billions of dollars in investments. Instead, it was the susceptibility of the financial industry to look for companies that could grow rapidly, producing returns that exceeded more established firms—such as those that bought and sold buildings in New York.

Neumann hit the jackpot in 2017 when Japan’s SoftBank poured $9 billion into WeWork. It only took its CEO Masayoshi “Masa” Son 12 minutes with Neumann to become its biggest investor. When Wall Street saw the ordinarily shrewd Masa Son putting his chips on the table, it followed suit. It became the classic bubble just like the collateralized mortgage market 10 years earlier. Neumann, who was a big a bullshit artist much of the time just like fellow real estate magnate Donald Trump, said that Jamie Dimon, the CEO of JPMorgan Chase, was his “personal banker.” He also claimed that Dimon, a powerhouse in the financial world, would leave the institution to run Neumann’s personal investment fund. None of this was true.

In 2019, WeWork was supposed to issue an IPO. Whenever a company goes public, financial experts always look at its profitability under a microscope. Not only did they discover that it was losing money but that the IPO brochure was filled with cultish tributes to Neumann and his wife that did not pass the smell test. On top of that, Neumann was involved in a minor scandal that might have not frightened investors off if the company’s financials were promising. After arriving on a private jet in Israel, he left a cereal box stuffed with so much pot that the crew called the plane’s owner. He ordered the plane back, leaving Neumann stranded, since he didn’t want to look like someone involved in international drug trafficking. News of these gaffes spread quickly. The IPO was cancelled and Neumann was forced out. SoftBank took over WeWork, which is now run like a nice old-fashioned real estate outfit.

For coverage of this bizarre tale, the Wall Street Journal is the best source. However, most of the reporting was on Neumann’s antics and the financial rigmarole. To really get an idea of how the thousands of his employees fared, you need to watch the Hulu documentary. Since I had no need to sign up for another streaming service (I can barely keep up with the screeners I get from publicists), I took out a trial subscription, watched the film, and then unsubbed. You might want to do this yourself although Hulu isn’t bad.

Working at WeWork was a real blast for many of its Generation Z employees. Neumann threw wild parties where the booze flowed like water and where entertainment came from popular hip-hop musicians. The yearly company outing took place on a campground in England that resembled a miniature Woodstock. On top of all this, the workers believed that their shares in the company would make them millionaires, as if they were one of the first one hundred people working for Google or Facebook.

But for most, the real appeal was working for a company that was involved with a paradigm shift. In his pep rallies, Neumann reminded them that they were working for a “capitalist kibbutz”. For the average employee, this meant that the company’s “sharing” ethos was almost like socialism. With great times during the work day, a belief that they were in the vanguard of a revolutionary change, and the promise of becoming millionaires one day, they were willing to work 12 hours a day at a salary below real estate industry standards. Toward the end of the film, you hear the poignant voices of a number of those who lost their job. Neumann walked away with millions. They got nothing. It is hard not to see them in terms of Bernie Madoff’s victims. Madoff, who just died, was an expert at gaming the system. As for the people Neumann and Madoff cheated, they had little reason to believe that they were being conned. As for me, I never once believed that my 9-5 job had anything to do with changing the world. Instead, Marx’s words from the Economic and Philosophical Manuscripts of 1844 always stuck with me:

First, the fact that labor is external to the worker, i.e., it does not belong to his intrinsic nature; that in his work, therefore, he does not affirm himself but denies himself, does not feel content but unhappy, does not develop freely his physical and mental energy but mortifies his body and ruins his mind. The worker therefore only feels himself outside his work, and in his work feels outside himself. He feels at home when he is not working, and when he is working he does not feel at home.

Louis Proyect blogs at Louisproyect.org and is the moderator of the Marxism mailing list. In his spare time, he reviews films for CounterPunch.