Redfin Cuts 13% of Staff in Advance of Long Housing Drought
Anticipating a housing market downturn that will stretch into next year, online real estate seller Redfin is laying off 13% of its staff and shuttering its home-flipping service RedFinNow.
The layoffs will affect 862 people, CEO Glenn Kelman said in an email to employees Wednesday (Nov. 9). It is the company's second round of layoffs this year as companies in the housing sector fall victim to spiking mortgage rates.
“We’ll still need home-services employees for our concierge service to fix up brokerage customers’ listings, but since that group spent most of its time renovating RedfinNow homes, it will get much smaller,” Kelman wrote.
The company’s headcount has dropped by 27% since April 30, with Redfin eliminating the roles of 218 employees who can choose to stay with the firm in a different role. If all of those employees decide to leave, the reduction of staff would be 16% this month and 29% since April.
“We plan to keep increasing our share of the market, but that market in 2023 is likely to be 30% smaller than it was in 2021,” Kelman said. “The June layoff was a response to our expectation that we’d sell fewer houses in 2022; this layoff assumes the downturn will last at least through 2023.”
Redfin is among a number of platforms that had set out to disrupt the housing industry but have found themselves in rocky waters lately, with mortgage rates at levels not seen in 40 years.
As PYMNTS noted last week, “it’s no longer a buyer’s market or a seller’s market — indeed, it’s tough to see whose market it is at all.”
Consumer lending company Upstart recently eliminated 140 positions — about 7% of its staff — due to a “challenging economy” that is reducing loan volumes. The staffers, according to an SEC filing, had been focused on helping to process loan applications.
Last week also saw Opendoor Technologies, which operates a platform for buying and selling properties, announce it was letting go of 18% of its workers, or 550 people.
“The reality is, we’re navigating one of the most challenging real estate markets in 40 years and need to adjust our business,” CEO Eric Wu said.