CEO fired staff to cut costs, then threw a tequila-soaked in-office concert

WeWork CEO Adam Neumann. Photo / Getty Images

The billionaire founder of a successful start-up reportedly threw a tequila-soaked in-office concert moments after discussing cost-cutting layoffs with staff.

A report from The Wall Street Journal revealed how WeWork CEO Adam Neumann fired 7 per cent of his staff in 2016.

A few weeks later, Neumann addressed the issue at an all-hands meeting at WeWork's New York City headquarters where he described those layoffs as necessary to cut costs.

Moments after the meeting, staff were treated to tequila shots and a performance by Darryl McDaniels of hip-hop group Run-DMC, according to The Journal.

Vanity Fair reported some staff said they were stunned and confused while other workers danced to the 1980s hit "It's Tricky" as tequila trays made more rounds.

Last week Neumann was slammed after it emerged he received a staggering US$5.9 million ($9.2m) from his own company for the use of the word "we".

According to Business Insider, the payment came about when WeWork "reorganised and rebranded" as The We Company in January ahead of its initial public-offering filing.

Neumann owned the trademark "We" through a private company, We Holdings LLC, which then sold the use of the word to WeWork.

The controversial move was panned by a range of experts, including New York University marketing professor Scott Galloway, Axios' Dan Primack and Trition Research Inc CEO Rett Wallace.

"Adam also owned the rights to the 'We' trademark, which the firm decided they must own and paid the founder/CEO US$5.9m for the rights. The rights to a name nearly identical to the name of the firm where he's the founder/CEO and largest shareholder. YOU. CAN'T. MAKE. THIS. S*IT. UP," Galloway said, according to Business Insider.

Meanwhile, Vanity Fair quoted Primack as saying it was "abusive of the company's balance sheet", while Wallace described it as a "masterpiece of obfuscation".

In the wake of the outcry, WeWork backtracked, revealing in a document filed with the Securities and Exchange Commission it had reclaimed the money — and the use of the "we" trademark — at Neumann's request.

"The issuance to We Holdings LLC of the partnership interests was unwound and the partnership interests were returned to the We Company Partnership," the document reads.

"The We Company continues to hold all of the assigned rights to the 'we' family trademarks." According to Forbes, the company has raised "about US$8 billion from investors like Goldman Sachs and SoftBank" since its inception nine years ago.

WeWork rents out office space in more than 90 cities globally and was most recently valued at US$42b.