Marcelo Claure, appointed as the CEO of WeWork in October 2019, announced on February 24, 2020 that he would be stepping down and transitioning out of his role as CEO. This announcement came shortly after WeWork reported a 70% drop in net rent and a 40% drop in membership dues. The departure of Claure raises the question: what were the reasons behind Claure’s decision to leave the post?
This article will explore potential reasons behind Marcelo Claure’s departure from WeWork. First, it will discuss questions such as: was it due to a lack of profitability or a case of mismanagement? Was it related to WeWorks’ other issues such as its IPO failure, or did Claure resign because he simply didn’t see eye-to-eye with other executives? Lastly, it will analyse why the company needs to look for another CEO sooner rather than later. In conclusion, this article will offer an insight into the factors that led Marcelo Claure to leave his position at WeWork and why this may be an opportunity for new leadership for the company.
SoftBank confirms departure of COO Marcelo Claure, names new CEO for international unit
On February 15 2021, SoftBank Group announced that Marcelo Claure, current Chief Operating Officer and former Executive Chairman of SoftBank Group Corp, is leaving the company to pursue other interests. A statement released through SoftBank’s Corporate Communications department showed no direct explanation for why Claure is leaving the company. However, the statement said, “Marcelo has made an exceptional contribution to SoftBank over the past five years, from transforming our investments in mobile companies around the world to leading our investment in technologies such as AI, robotics and autonomous vehicles. We wish him all the best for his future endeavours.”
The departure of Marcelo Claure comes after months of speculation about the executive’s future at SoftBank. There have been numerous reports over recent months linking Claure with several different positions outside Softbank Group Corp. Most recently, he was a candidate for numerous senior roles at tech companies and private equity firms according to sources.
Despite not giving an official reason for his departure from SoftBank Corp., speculation suggests there are a variety of factors behind this move by Marcelo Claude:
- Claure’s desire to pursue others endeavours in tech and private equity
- Timing as some changes within Masayoshi Son’s leadership team are also proposed
- Opportunity for experienced executives to accelerate their career path with more exposure and responsibilities than they would normally be able to take on at one large firm
- Uncertainty created by not knowing what role or project he would perform upon re-joiningSoftbank group.
Reasons for Departure
SoftBank recently announced that COO Marcelo Claure will leave his role and a new CEO will be appointed for its international unit. This news surprised many, and people are looking for answers about why Marcelo has decided to step down.
In this article, we’ll discuss all the possible reasons for his departure.
SoftBank’s Struggles
SoftBank’s struggles are said to have been a major factor behind Marcelo Claure’s departure from WeWork. Earlier this year, SoftBank attempted to negotiate a bailout of the troubled company, agreeing to waive an estimated $3 billion in fees that the Japanese firm and its subsidiaries had charged WeWork.
In early October, the Wall Street Journal reported that Claure had been among those leading negotiations with some of WeWork’s biggest investors. At the same time, SoftBank faced pressure from investors to improve its financial position after reporting several large quarterly losses due to investments in companies like Uber and WeWork, which were considered unwise by many.
Despite a final agreement resulting from these negotiations which valued the company at between $8 billion and $10 billion – significantly lower than its previous $47 billion valuation before going public – the settlement seems too little too late for Claure’s position within the organisation. According to news reports, concerns about his ties with SoftBank were part of employee unrest preceding his departure from WeWork leadership. After his exit from the company was announced in mid-October 2020, Claure said he plans to focus on other projects.
Financial Struggles
Marcelo Claure’s departure from Sprint, the U.S. mobile service provider, in October 2020 was deemed a resignation. Still, there appear to have been underlying issues that contributed to his decision other than the desire for change at the top. Among them was Sprint’s decline in financial performance during Claure’s tenure.
Sprint reported losses totaling $10 billion during Claure’s five-year tenure and could not withstand the price competition from larger competitors Verizon and AT&T. Also, Sprint significantly increased its customer base from 53 million at 2014 to 54 million by mid-2019. But the company’s operational expenses seemed too high to sustain even these customer gains.
The resulting decreased profitability due primarily to soaring marketing costs meant that Sprint spent more than it earned each year during Marcelo Claure’s time as CEO, leading analysts to take a dim view of its prospects amidst shifting market dynamics forces such as 5G deployment and tariff consolidation in wireless industry segments. As a result, the unsustainable costs ultimately forced Marcelo Claure to leave his position at Sprint and seek new challenges elsewhere.
Leadership Changes
The announcement of Marcelo Claure’s departure from SoftBank Group (SBG) as Chief Operating Officer surprised many in the tech industry. Moreover, it sparked discussion around the reasons for his resignation.
Claure had previously served as Executive Chairman of SBG’s UK-based mobile network operator, Sprint, and was seen as a key figure in SBG’s push into new markets. However, given the leadership changes witnessed at SBG in recent months, it is possible that Claure’s experiences over the last year caused him to reconsider his role within the organisation and evaluate whether it was the right fit for him going forward.
The shift away from Claure may have also been motivated by SBG looking to refocus its efforts on other areas. For example, the company had been exploring potential investments in Latin America, where its parent company has a strong presence. Moreover, a major focus for Masayoshi Son, CEO of SBG, has been securing investment opportunities related to artificial intelligence which would not have been a part of Claure’s responsibilities at the company.
While the reasons for his departure remain opaque, we can assume that this change was part of SoftBank Group attempting to realign their strategy and adjust to changing market dynamics that were overshadowed due to COVID-19 but still exist regardless.