WeWork Founder Neumann Integrated Jewish Mysticism Into Business

Former WeWork CEO Adam Neumann integrated the Jewish mystical tradition of Kabbalah into daily life during the company’s early years – while also tapping the religious sect’s network of wealthy adherents for funding, according to the Wall Street Journal.

Every week, WeWork senior executives would gather in Neumann’s office to study with a teacher from the Kabbalah Centre – one of the group’s locations in over 40 cities across the globe, including New York and Los Angeles.

While sessions weren’t mandatory, participation was encouraged according to people who attended the meetings with the spiritual leader.

At least two students were sources of early funding while several senior employees were Centre students, according to people familiar with the matter. Its tenets influenced WeWork’s community-centric philosophy, and its teachers were a regular presence in the company’s offices and on company retreats, according to other people familiar with the matter. –WSJ

Kabbalah originated in 12th-century France, and aims to uncover how divine forces powering the universe are related to the Torah. Many celebrities, including Ashton Kutcher and Madonna, practice the unique brand of self-help Jewish mysticism.

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.

While in a hot tub on his 39th birthday in 2018 and talking on a conference call with WeWork executives, Mr. Neumann decided WeWork would sell $702 million in its first bond offering, according to a person who witnessed the scene. Mr. Neumann came to that figure by multiplying his age by 18, boosting the planned borrowing amount by $2 million, people familiar with the matter said.

Mr. Neumann at one point told staff he was hoping to hold We’s IPO on Sept. 18, citing the date’s spiritual significance, before it got pushed back, current and former We employees said.

WeWork’s parent company, We Co., shelved plans for an IPO last month amid controversy over governance issues and investor concerns over skyrocketing losses. Neumann, who stepped down during the controversy, stands to see his voting power further diluted as SoftBank Group – which already owns 1/3 of the company, explores new financing.

Neumann was introduced to Kabbalah by his wife, Rebekah Neumann, who according to the Journal “studied a variety of spiritual traditions.” In 2012, he told the Real Deal that the Centre was fundamental to the creation of WeWork – saying “I wanted to translate that into business.”

That said, Neumann cut ties with the centre around four years ago after a falling out after he felt the group’s leadership dismissed his advice on how to handle several controversies.

According to those people, one of those controversies revolved around the aftermath of a civil lawsuit filed by a former student who alleged she was sexually assaulted by the Centre’s former co-director, Yehuda Berg. Mr. Berg denied the assault allegations but testified that he gave the woman drugs and alcohol. In 2015, a civil jury ruled that the Centre had been negligent in its supervision of Mr. Berg and that he had inflicted emotional distress on the woman. The jury ordered them to pay $177,500 to the former student.

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Another controversy, the people said, had to do with compensation of workers who provided spiritual guidance to students and performed other services at the Centre. Several of those workers later sued the Centre seeking what they said were years of unpaid wages. The Centre responded that the workers had agreed to limited compensation, and it is seeking to throw out the suit. –WSJ

The Neumanns have denied that Kabbalah played a prominent role in the company, saying through a spokeswoman ” Many teachings have come together to ground WeWork’s philosophy and mission. Kabbalah is not prominent among them and has not influenced business decisions.”

The Kabbalah Centre was led by Rabbi Philip Berg until his death in 2013 – after which his wife Karen became CEO and ran the organization with her two sons, Michael and Yehuda.

After WeWork was founded in 2010, the Berg family and Kabbalah Centre teachers reportedly canvassed the group’s rich followers for investments or other help in Neumann’s business, according to the report.

Mr. Neumann became close to Steven Langman, co-founder of private-equity firm Rhone Group, and Marc Schimmel, a real-estate investor, through Michael Berg. The Centre students spent time together at Mr. Berg’s New York home and had dinner at each others’ homes, the person said. Both men invested in WeWork.

Rhone became WeWork’s partner in a property-investment fund. Mr. Langman is a member of the company’s board. –WSJ

Another Kabbalah link, fashion designer Elie Tahari, jointly purchased a Manhattan office property with Neumann in 2015 – later leasing it to WeWork. His ownership stakes and personal profiteering in real estate used by the company were one of several corporate-governance issues raised by concerned investors.

In May, the company announced that control over said real-estate would be handed over to an investment unit of the company in order to eliminate potential conflict of interest.