At Fast-Growing WeWork, an HR Department in Turmoil

The reasons behind the HR departures vary, and most left voluntarily. Some had frustrations with the company’s leadership, according to interviews with current and former WeWork employees. In particular, some HR leaders objected to behavior by WeWork CEO Adam Neumann, who has at times denigrated employees behind their backs, calling some “B players,” according to three people who witnessed him doing so. Some clashed with WeWork co-president and chief legal officer Jen Berrent, a powerful executive who runs the department.

Some of WeWork’s issues with the HR department could wind up in court. Lisa Bridges, an executive in charge of compensation, alleged sexual harassment and gender discrimination in a June lawsuit. It also alleged Berrent ignored a compensation analysis that Bridges oversaw which found that nearly all WeWork employees awarded at least $1 million in equity at one point earlier this year were men. Ruby Anaya, who was director of culture, alleged in a lawsuit last year that she faced sexual harassment that HR leaders failed to investigate. WeWork previously has denied both claims.

Executives who left voluntarily this year include two officials with the title of senior vice president of people; the head of people strategy; the interim head of HR; the head of learning; and the senior director of talent acquisition. The company last year searched for a chief human resources officer, but didn’t fill the role. It started searching again about two months ago. 

“That’s an extraordinary amount of turnover, on the face of it,” said Rebecca Guerra, a former human resources executive at Adobe Systems and eBay who now consults for tech companies. She added that having continuity in its HR leadership was particularly important in the run-up to an IPO. “The absence of those people and the rapid turnover is pretty disconcerting at their stage.”

Goals vs. Actions

Neumann’s management style may come under more scrutiny as the company goes public. The 40-year-old Israeli-born entrepreneur, known for negotiating with potential hires and acquisitions over rounds of tequila shots, will increase his majority voting stake in the IPO. Some current and former employees have complained that he has stocked the company’s ranks with friends and family members, while often shifting who else holds power in the company by changing top responsibilities and reporting lines, as The Information has reported previously. 

Other close to Neumann give his management style the benefit of the doubt, saying he wants to “create healthy tension and conflict in the company,” according to a current employee. 

Neumann’s close involvement has loomed large over the human resources department, particularly as the division put more stringent systems in place to review employees’ performances. He and Berrent have at times over the past year discussed with executives the idea of identifying the bottom 20% of performers each year for possible dismissal, two people familiar with the matter said. It wasn’t clear whether that initiative was carried out. Other companies, such as General Electric and Amazon, have been known to pursue similar strategies of regularly firing the worst performing employees.

The company’s employee review system, installed for the first time last year, is still in its infancy. WeWork let go of about 3% of its staff in a review this spring. The workload “crushed HR,” a former manager said.

WeWork’s discussions about cutting a large percentage of the employee base hurt morale in the HR department, the people said.  

WeWork also is growing at a pace that would challenge most HR departments. The company, which has officially changed its name to the We Company, expects to have more than 15,000 employees by the end of 2019, up from about 4,000 at the start of 2018. 

As its workforce has swelled, WeWork has struggled to keep up with other traditional HR functions, including coordinating equity packages and defining the organizational structure, according to interviews with current and former WeWork employees and managers.

WeWork appears to have recognized it needed help. Earlier this year, the company hired Frances Frei, a professor of technology and operations management at Harvard Business School, to consult on HR and culture, giving talks to employees and leadership. Former Uber CEO Travis Kalanick brought Frei into the ride-hailing giant at the apex of its culture and leadership crisis.

The turnover at WeWork contrasts with stability atop HR at other tech firms known for their durable employee culture. Netflix’s chief talent officer, Patty McCord, ran the department for 14 years. Amazon’s former top HR leader Tony Galbato and Google’s former chief Laszlo Bock stayed in their respective roles for more than a decade. But fast-growing companies such as Uber have cycled through HR chiefs amid management and culture problems.

Previous top HR leaders at WeWork haven’t lasted, either: From 2015 to 2018, the company lost a chief human resources officer, senior vice president of talent, vice president of talent acquisition, head of people processes and systems, and vice president of total rewards. The department, which now sits under Berrent, at one point reported to co-founder Miguel McKelvey, who is now chief culture officer. 

A WeWork ‘Lifestyle’

The departures stand out in a company known for taking elaborate steps to try to keep employees involved in their jobs. WeWork staged highly produced internal events, such as an annual employee “summer camp” with performances from artists like pop star Lorde, and an annual summit featuring inspirational talks from celebrities including rapper Jaden Smith and figure skater Adam Rippon. 

The events helped reinforce WeWork’s self-professed mission “to create a world where people work to make a life, not just a living.” They also helped helped ingratiate the company to its younger workforce, some of whom have WeWork tattoos and live with fellow employees. The average age of a WeWork employee was about 28 years old, Berrent said in 2017. (That average age has likely surpassed 30 at this point, a person familiar with the matter said.)

“WeWork just becomes your life. They push this lifestyle: meet your spouse at WeWork, have a kid,” said a former HR manager. (Neumann’s own wife, Rebekah, is a WeWork co-founder and head of WeGrow, a division of the company that runs an elementary school that their children attend.)

The summit and summer camp have created their own issues. An HR leader who left early from a summer camp event two years ago was fired, and the camp incident was a factor in her dismissal, a person familiar with the matter said. Anaya, the former director of culture, alleged in an October 2018 lawsuit that she was sexually harassed by male WeWork employees twice—once at the summit, once at the summer camp.

The company discontinued summer camp this year. In January, a summit in Los Angeles included mostly newer employees. It was seen by some as poorly timed for WeWork’s leaders: The company had just filed confidentially to go public after talks for a $16 billion investment from SoftBank had fallen through. The company’s growth slowed down earlier in the year, a person familiar with the matter, before bouncing back later.

The HR department is now led by Matt Jahansouz, global head of talent and recruiting, and Tom Osmond, chief operating officer for human resources. 

John Reid-Dodick, a former HR chief at AOL and Thomson Reuters, was WeWork’s chief people officer for two years before moving under McKelvey as senior vice president of culture, which he describes as extending “WeWork’s ‘culture operating system’ or ‘cultureOS’ to help enterprises and entrepreneurs build and evolve great cultures,” according to his LinkedIn profile.

Male-Dominated Leadership

Like many other tech companies, WeWork lacks diversity in its leadership. All seven members of its board of directors are male, as are 80% of Neumann’s direct reports. 

Bridges, a former senior vice president who oversaw compensation issues, alleged in her lawsuit this summer that WeWork ignored a gender pay gap. She said she found that 55 of 58 stock grant awards greater than $1 million that the company's compensation committee were slated to approve in February went to men. 

WeWork put Bridges “on leave” earlier this year after she raised these issues internally, according to the lawsuit, which was filed in June. She had also sued a previous employer, McDonald’s, for not fully disclosing executive compensation to investors.

There isn’t any indication that the troubles atop the human resources division have hurt morale among rank-and-file employees, many of whom work far from the New York headquarters at co-working sites around the world. But a number of current and former WeWork employees said they questioned whether the high-attrition department would lead to problems keeping its employee base happy down the line.

“WeWork puts out a message of elevating the world’s consciousness,” said a current employee. “The HR department—the people supposed to be the folks dogfooding that message—can’t stay.” 

This article has been revised to clarify the description of Lisa Bridges' criticism of employee stock awards.

—Ross Matican contributed to this article.