- WeWork has sold its majority stake of the China business to Trustbridge Partners.
- WeWork will retain a minority stake and a seat in the board of the China business.
- Michael Jian, Trustbridge’s operating partner, was named acting CEO.
The Wall Street Journal (paywall) was first to report late yesterday evening that WeWork is selling control of its China business.
According to the report, “a group led by investment firm Trustbridge Partners paid $200 million to increase its stake in WeWork China.”
The coworking company has been focusing on cutting costs and slowing down growth since it’s IPO attempt went downhill last year.
The deal resembles a traditional franchise model, the Wall Street Journal reported. WeWork is giving up operating control of its China arm, however it will retain a minority stake and will keep a seat in the board of the China business.
Michael Jiang, Trustbridge’s operating partner, was named acting CEO of WeWork China following the deal.
Trying to Keep the Company Afloat
Sandeep Matrahi, CEO of WeWork, has focused on reducing risk and bringing the company to profitability since he took over after Adam Neumann was ousted.
Over the past 6+ months, Matrahni has slowed down the global growth of the company, negotiated rent reductions, and closed locations in the hopes of cutting costs. The company has also let go hundreds of employees.
The company has been hard hit by the pandemic and it has been trying to woo landlords into management agreements in order to reduce its risk and its long-term lease commitments. The company has also stated that it will focus on acquiring corporate clients in hopes of increasing revenue.