Adam Neumann is stepping down as WeWork’s CEO, capping a stunning downfall. WeWork will have two chiefs in the meantime while it hunts for a permanent leader.

Adam Neumann just stepped down as CEO of WeWork, the New York Times reported. He will continue as chairman of the company. 

The move comes after board members were reportedly mulling how to push out the WeWork co-founder and controversial CEO after the company delayed its initial public offering amid concerns about its business model, valuation, and governance.

Neumann co-founded WeWork with his wife, Rebekah, and architect Miguel McKelvey in New York in 2010. Since then, the company has expanded to 528 locations in 29 countries. WeWork, now known as We, ushered in a new way to think about designing and leasing office space – but remains far from profitable.

See more: WeWork lays out its path to profitability – and most of its options involve slowing its breakneck growth

In a filing ahead of its planned IPO, We estimated that market opportunity for its business could be $1.6 trillion, but in the first half of 2019, it lost $690 million on $1.5 billion in revenue. That filing also detailed Neumann's web of loans, real-estate deals, and family involvement with the company. Over the last month, We worked to address some of those issues, but the company's unusual governance and concerns about its resiliency in an economic downturn were still a red flag to some investors. 

The company took the drastic step of mulling slashing its IPO valuation to as low as $10 billion, according to media reports — well below the private valuation of $47 billion it secured in January. The company also needs to raise $3 billion in a public offering in order to unlock a $6 billion bank financing package. 

Per We's S-1 filing, Neumann does not earn a salary and would not be entitled to severance if he was no longer CEO. In the first half of 2019, WeWork granted Neumann options on common stock that would vest based on a successful IPO and the company hitting certain market capitalization, up to $90 billion. 

Read more: WeWork cofounders Adam and Rebekah Neumann are close friends with Ivanka Trump and Jared Kushner and invited them to Rebekah's extravagant 40th birthday bash in Italy

Investors had proposed ousting Neumann by leveling legal threats at him over "self-dealing," the New York Times said. Neumann holds stakes in companies that have bought properties then leased them to WeWork, giving him conflicting incentives as both landlord and tenant.

Other shareholders were calling for an inquest into Neumann's use of company money and whether he took drugs while working, The Times said. The Wall Street Journal last week recounted claims from anonymous sources that Neumann smoked marijuana on a private flight from New York to Israel. The Journal said the jet's owner recalled the plane before Neumann reboarded after the flight crew discovered more of the drug stuffed in a cereal box for the return journey.

We declined to comment on the drug allegations. A We spokeswoman declined to comment on this story to Business Insider.

See more: WeWork's board is reportedly meeting to discuss ousting Adam Neumann as CEO — here's who the key players are

After an overhaul of its governance failed to relieve investors' concerns, We faced the prospect of failing to raise the $3 billion needed for it to unlock $6 billion in bank financing, leaving it with little choice but to delay its public debut.

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