A Redfin sign in front of a house for sale.Sundry Photography/Shutterstock
The layoffs at Redfin and Opendoor are the latest signs of trouble for the embattled real-estate industry.
Deals that were once profitable for the industry and home purchases that had been affordable for everyday people have been getting slammed by or because of the higher borrowing costs.
The aggressive interest-rate hikes by the Federal Reserve and a looming recession have resulted in layoffs galore across the real-estate world, whose stormy seas have triggered worry elsewhere in the economy. The cutbacks are sobering for an industry that just a year ago was flying high with home-price appreciation, increasing rents and plentiful funding for proptechs.
The downsizing began in the mortgage industry with Better's Zoom layoffs at the end of last year. That abrupt move came amid expectations for a big slowdown in 2022, and residential brokerages like Compass, Redfin, and Side followed suit as transaction volumes skid.
With signs of distress spreading through the office market and among homebuilders, and rate hikes anticipated into 2023, layoffs are mounting. The Mortgage Bankers Association — the industry's largest trade group — anticipates an attrition rate as high as 30%, according to a spokesperson.
Indeed, more industry jobs are likely on the line with demand for mortgages now its lowest level since 1997, per the MBA. Some of the latest and notable casualties came from real estate marketplace giant Zillow, consumer lender Finance of America, and international vacation rental company Vacasa.
Insider is keeping track of where job cuts are taking place in the residential and proptech sectors, including at companies that have wielded an axe more than once. The companies with layoffs are listed below in alphabetical order.
Do you know of other real estate tech or mortgage-related layoffs? Were you affected by them? email anicoll@insider.com or rdavis@insider.com.
Israeli proptech startup Anywell, a company that creates hybrid workspaces, announced in August that it will lay off 50% of its workforce in a restructuring. The move impacted 11 employees, primarily from Anywell's operational staff.
Anywell's latest round of layoffs came just five months after it raised $10 million in a Series B round. A total of 14 employees have left the company since March.
The company added that it plans to focus on software-based solutions.
Apartment listing services are facing mounting economic pressure.
Mathew Woods, CEO of ApartmentList.com, announced on LinkedIn on August 31 that the company was laying off 29 people, or approximately 10% of its workforce. Woods said the company was "reacting to market conditions."
The online mortgage lender Better started laying people off earlier than most of the companies on this list.
In December, CEO Vishal Garg cut 900 employees via Zoom meeting, a move that made headlines around the world. Before the layoffs, Better employed about 9,000 people, 7,000 of whom were hired since the start of the pandemic.
The company has since announced another wave of layoffs, cutting 3,000 more employees in March. Insider reported some employees found out they were being laid off when their bank statements received direct deposits for severance payments or when they abruptly lost access to their work computers.
The company, which has said it still plans to go public this year, announced voluntary buyouts for employees in some positions and departments in April. Garg, Better, and the blank-check company trying to take the mortgage company public have received formal inquiries from the Securities and Exchange Commission about their business operations and the company's former chief operating officer's claims about corporate malfeasance.
Blend, the publicly traded mortgage-tech company that builds software for major mortgage lenders, laid off 200 people, or 10% of the company, in April, according to a filing with the Securities and Exchange Commission first reported by HousingWire.
The company had been signaling it had hard times ahead since the end of last year, as declining loans were forecast to hit the company just as hard as its clients, who are the ones actually lending.
Bungalow, a company that turns traditional single-family homes and apartments into coliving spaces for roommates, laid off 75 people, or 35% of its workforce, in June, according to Layoffs Tracker and posts by former employees on LinkedIn.
The company raised $75 million last year from a mix of investors, led by Deer Park Road Management, with Coatue, Khosla Ventures, Founders Fund, and Atomic also investing. The round valued the company at $600 million.
Clear Capital, a real estate appraisal technology company, laid off 27% of its workforce on October 14, according to Layoffs Tracker and LinkedIn posts from former employees.
The layoffs will impact 378 employees – about 27% of the company's workforce as rising interest rates result in a significant decrease in volume from its customers.
"Clear Capital is restructuring all company divisions to reduce expenses and support our future business strategy amidst today's housing market reality," CEO Duane Andrews told Insider.
The residential brokerage Compass announced it laid off 10% of its workforce — about 450 employees — in June as residential transactions slowed down. The layoffs did not include real-estate agents, who are independent contractors and not directly employed by the company.
Compass, which went public in April 2021 at roughly $20 a share, is down almost 80% over the past two years and trading below $5 a share. The company also plans to combine some offices and pause its plans to expand and acquire other companies.
A laid-off employee talked to Insider's Zoe Rosenberg about their experience.
"My lingering thought is that whatever the impacts of the IPO and the impacts of our rapid expansion across the country, the impacts of the market on our futures — is just that those impacts didn't seem to be handled appropriately, or in the best manner for the associates' longevity with the company," they said.
Divvy Homes, a rent-to-own real estate company, in September laid off 40 employees, representing more than 12% of its workforce, according to Layoff Tracker.
The San Francisco-based company has raised more than $1.5 billion since it was founded in 2017 and is backed by large investment firms such as Andreessen Horowitz and Tiger Global Management.
"Although we recognized these macroeconomic challenges in late summer 2022 and took steps to substantially reduce our cost structure in response, it unfortunately was not enough," Kyle Zink, Divvy's VP of Marketing, told Insider.
"Realistically, the macro environment is likely to remain volatile and challenging for the foreseeable future. As a result, we needed to adjust headcount to reflect the new reality today," Zink continued.
Finance of America Mortgage, a multichannel mortgage lender headquartered in Plano, Texas, laid off hundreds of employees between the second and third quarters of 2022, HousingWire reported in August.
The layoffs impacted employees in the US and in the Philippines where workers performed back office tasks such as appraisal checklists, according to HousingWire.
"The discontinuation of the forward mortgage originations segment will allow FOA to optimize its resources and prioritize businesses that have a distinct market opportunity and greater growth potential," FOA Interim CEO Graham Fleming said in a press release.
First Guaranty Mortgage Corp., a Plano, Texas, lender, laid off 80% of its employees, The Dallas Morning News, and paused making new loans in late June, fueling speculation that the company was going to go bankrupt. The company was backed by the major asset manager Pimco.
Just a few days after cutting 471 employees, the company filed for Chapter 11 bankruptcy protection, with more than $473 million in debt. The company, which originated $11 billion in mortgages last year, had projected it could originate only $5 billion to $6 billion in mortgages this year.
Flagstar Bank, a Michigan bank, cut its mortgage staff by 20% in April.
In a statement to HousingWire explaining the 420-employee layoffs, CEO Alessandro DiNello cited interest rates rising "at the fastest rate this century." In the first quarter of 2022, the company's mortgage originations were down 40% from the first quarter of 2021.
FlyHomes, an online brokerage service, cut 20% of its staff, or about 200 people, in July. The company blamed economic headwinds and rising interest rates, GeekWire reported.
The Seattle-based company has raised more than $310 million since it opened in 2016. Some of its investors include Andressen Horowitz, Camber Creek, and Spencer Rascoff, who co-founded Zillow.
Austin, Texas-based startup Homeward, which is pioneering the "move now sell later" transaction, laid off 20% of its workforce in August as housing transactions dropped.
"We don't know how long real estate will continue to soften, so we must plan for a less active market," Tim Heyl, Homeward's CEO, wrote in an email to employees, according to a report by The Austin-American Statesman.
The company has raised more than $500 million since it opened in 2018 from investors such as LiveOak, Javelin Ventures, and KeyStone Bank. Homeward raised $136 million in its Series B round, which closed in May 2021, according to Crunchbase.
Homie, an online discount brokerage in Utah, laid off another 40 employees from its Salt Lake City location in October. The round of layoffs account for approximately 13% of its workforce, and brings the company's total cuts for the year up to 159, according to Layoff Tracker.
CEO Johnny Hanna said the changing real-estate market and record-low inventory contributed to the decision to trim staff.
The layoff wave hasn't affected only smaller lenders and proptech startups.
America's largest bank, JPMorgan Chase, laid off more than 1,000 mortgage employees in June, Bloomberg first reported.
The layoffs were a result of "cyclical changes in the mortgage market," a bank spokesperson told Bloomberg.
Commercial real estate software startup Juniper Square laid off 14% of its staff in August, said Chief Marketing Officer Matt Lawson.
Lawson said the move primarily impacted Juniper's sales division. Despite the round of layoffs, the company's staffing total will still likely be 20% above last year's, he added.
Since opening its doors in 2014, the proptech startup has raised more than $108 million from investors that include Ribbit Capital, Zigg Capital, and Ovo Fund. The company raised more than $75 million in its Series C funding round in September 2021.
Keepe, a Seattle home-repair company, cut an unspecified number of workers from its small workforce in June, GeekWire reported. (GeekWire counted a total of 36 Keepe employees on LinkedIn.)
The company provides home-repair services for other businesses, such as property managers and large corporate landlords.
The mortgage arm of the major brokerage Keller Williams, Keller Mortgage, laid off 150 new hires in October, then laid off many more employees in May, a round that former employees described as "big," "massive," and "huge," according to The Real Deal.
The division is largely focused on purchase mortgages because of its relationship with the brokerage.
San Francisco-based startup Kiavi, which offers loans to real estate investors, has felt the impact of rising interest rates on its customers. The company laid off 14 employees in July, representing about 7% of its workforce, HousingWire reported.
Kiavi grew quickly in recent years, and in May announced that it had surpassed $10 billion in loans to real estate investors since it opened in 2013.
In March, Knock, a startup that helps homeowners make an offer on a new house before selling their old one, laid off 46% of its staff, roughly 120 employees, Bloomberg reported.
At the same time, it halted its plan to go public via special-purpose acquisition company in March. The company had planned to go public at a $2 billion valuation but instead raised $70 million in equity and $150 million in debt in a private funding round that included the movie director M. Night Shyamalan as one of the investors.
Fully-furnished apartment provider Landing announced that it laid off 110 employees on October 6 and reshuffled another 70 positions to different parts of the country, according to AL.com.
The company that was founded in San Francisco moved its headquarters to Birmingham, Alabama, in 2021 with the goal of creating more than 800 full-time jobs in the state. Today, the company has a workforce of nearly 900 in the Birmingham area.
The mortgage lender Mr. Cooper, formerly known as Nationstar, has had two separate rounds of layoffs this year, one of 250 employees and another of 420 employees, or roughly 5% of the company's employees, according to The Real Deal.
Like other mortgage lenders, it was hit hard by rising rates, with its direct-lending business declining by 32% year over year.
Notarize, a Boston remote-notary service, laid off one-quarter of its staff — or about 110 people — in May, TechCrunch reported.
While Notarize is not a traditional real-estate company, it was boosted greatly during the pandemic by the boom in remote real-estate transactions. Many states loosened their rules about in-person notaries and other traditional closing procedures to allow transactions to continue during the early waves of COVID-19.
Notarize CEO Pat Kinsel said the layoffs were a result of "the state of the economy and world events" and that it may be harder than expected to raise further investment in the company. The company has raised $213 million since its founding in 2015, most recently a $130 million Series D last year.
Opendoor laid off 550 employees on November 2, according to a blog post on the company's website.
Founded in 2015, San Francisco-based Opendoor is America's biggest home-flipping company. It's also known as an instant buyer, or iBuyer, which means it buys up single-family homes across the country, lightly renovates them, then resells them for a profit.
The move impacted about 18% of Opendoor's workforce across all departments, the blog post said. Opendoor also offered laid-off employees job transition services and a severance package that includes at least 10 weeks of pay.
"We did not make the decision to downsize the team today lightly but did so to ensure we can accomplish our mission for years to come," Opendoor CEO Eric Wu wrote in the blog post. "And while we may be navigating a once-in-40 year market transition, it doesn't take away the difficulty, frustration, and sadness downsizing brings."
Orchard, a startup that helps homeowners buy a home before selling their current home, announced on LinkedIn in June that it had laid off 10% of its staff because of "mounting economic uncertainty."
The company subsequently released a spreadsheet of laid-off employees' names and contact information to recruiters to help them find new roles. The spreadsheet contained the names of 46 employees as of July 18.
Orchard became a unicorn last year. It was valued at $1 billion after a $100 million funding round led by Accomplice.
Pacaso, a real estate investment company founded by former Zillow executive Spencer Rascoff, laid off approximately 30% of its workforce on October 11, citing concerns about a global recession, according to The Real Deal.
Since its founding in October 2020, Pacaso has raised more than $1.5 billion in seven funding rounds, with more than $1.3 billion coming from debt. In September 2021, the company picked up more than $125 million in a Series C round from 11 investors, including Alumni Ventures, SoftBank's Vision Fund, and Fifth Wall.
Pennymac, a California nonbank lender, laid off another 80 employees in October primarily from its Roseville, Westlake, Agoura, Moorpark, and Pasadena locations in California, according to HousingWire.
The move comes after the company laid off almost 450 employees across two rounds earlier this year. The first round was announced in March, while the second was announced in May, with the layoffs occurring up to July, according to HousingWire.
San Francisco Bay area company Reali shuttered its operations in August, affecting 140 employees, TechCrunch reported. The company cited rising interest rates and a bad market for raising capital as the primary reasons for the shutdown.
Reali, which was founded in 2016 in Israel, sought to simplify real estate transactions by allowing customers to buy and sell homes in a single, coordinated transaction. This would have eliminated the need for contingencies and paying two mortgages at once.
The company raised a $100 million Series B round in August 2021.
Realtor.com, one of the most recognizable real estate marketplaces in the world, said in September that it was downsizing its workforce.
David Doctorow, the company's CEO, cited slow sales volume and economic headwinds as catalysts for the downsizing, according to Inman.com. A spokesperson declined Insider's request to comment on the move.
Seattle-based real-estate brokerage Redfin laid off 862 employees, or 13% of its staff, on November 9, according to a memo posted on the company's website.
The move comes after the company laid off 6% of its staff of almost 6,500 in June. Overall, employment at the company has declined by 27% since April 30, the memo said.
"A layoff is awful but we can't avoid it," Redfin CEO Glenn Kelman wrote. "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."
The company also said on November 9 that it was shutting down its home-flipping, or iBuying, business, called RedfinNow.
The New York insurance-tech startup Rhino laid off 57 employees, or more than 20% of its staff, in February, The Real Deal reported.
Rhino is one company in a growing group of proptech startups that pays renters' security deposits in exchange for small but nonrefundable monthly payments.
The company is part of the Kairos portfolio, a group of related startups led by the investor Ankur Jain. The layoffs came a year after Rhino raised $95 million in a round led by 2021's most active venture investor, Tiger Global Management.
New York City-based startup Ribbon, a software-as-a-solution company for real estate agents, laid off 136 employees in July as the company seeks profitability, Inman reported.
The move came after the company doubled its market footprint last year up to eight states, including Ohio, Arkansas, and Florida.
Ribbon has raised more than $900 million since it was founded in 2017. Some of the company's investors include Bain Capital Ventures, Greylock, and Goldman Sachs.
Rocket Mortgage, the largest mortgage lender in the country formerly known as Quicken Loans, has avoided layoffs by offering 8% of its workforce voluntary buyouts, providing months of compensation, medical benefits, and early stock vesting, National Mortgage Professional reported. It is unclear how many employees have taken the buyout offers.
Side, a startup that provides white-label brokerage services like marketing tools to independent brokerages, laid off 10% of the company's workforce. It cut roughly 40 people in June, Inman reported.
In June, a fundraising round brought the company to a unicorn valuation and within striking distance of going public.
CEO Guy Gal said in a statement provided to Inman and other outlets that the company grew too quickly to adequately onboard new employees and that leadership decided it needed to slow down growth in the face of the condition of the global economy.
Sonder, one of the multiple proptech companies to go public during a rush of SPAC deals, laid off 21% of its corporate employees and 7% of its frontline hospitality staff in June, Business Travel News reported.
Sonder operates short-term rental properties in apartment buildings, including some apartment buildings that it operates entirely as hotels.
CEO Francis Davidson said in a meeting, according to Business Travel News, that the layoffs were part of a plan to prepare the company for shifting market dynamics that value profitability over growth. Earlier in the month, Satyen Pandya, Side's chief technology officer, left the company, according to a Securities and Exchange Commission filing.
Sprout Mortgage, which touted itself as the largest originator of nonqualified mortgages, laid off all of its more than 300 workers and shut down operations earlier this month, as HousingWire first reported.
Sprout Mortgage is the latest nonqualified-mortgage lender to shutter after the closure of First Guaranty Mortgage Corp.
The news prompted a class-action lawsuit from laid-off employees who said they hadn't received paychecks for their last few weeks of work.
Sundae, a marketplace that allows homeowners to sell their homes to investors who then rent out the homes, laid off 15% of its staff, though the total number of people laid off is unclear, HousingWire reported.
The layoffs were in June, when Bloomberg reported investors had begun to slow their purchases of homes across the country to rent out because of higher borrowing costs.
Tomo, a mortgage startup that focuses on lending to home purchasers, laid off 44 people, or almost one-third of its workforce, in May, Insider previously reported.
Greg Schwartz, the company's CEO and cofounder, said the layoffs were a result of the "recent shift in the mortgage and venture-capital markets due to the rapid increase in interest rates."
Vacation rental startup Vacasa announced it laid off 280 employees on October 21, in a move that impacted approximately 3% of its workforce, the company confirmed.
The layoffs come just weeks after Rob Greyber took over as CEO. It was already trimming staff over the summer, when about 25 salespeople received pink slips.
Vacasa has struggled to become profitable since going public in 2021. The company lost $2 million in adjusted earnings in the third quarter of 2022, though it was better than its projected loss of $15 million to $20 million, according to its quarterly report.
"We do not take these decisions lightly, but we continuously assess our business, striving to optimize our resources and teams to be efficient and align with our priorities," a company spokesperson told Insider.
Wells Fargo laid off workers across its home-lending operations in April but declined to describe the size or scope of the layoffs to Insider or other outlets.
That same month, the company reported that revenues within its home-lending operation were down 33% year over year. The company's chief financial officer, Mike Santomassimo, appeared to forecast further layoffs during its first-quarter earnings call.
"We've started to reduce expenses in response to the decline in volume and expect expenses will continue to decline throughout the year as excess capacity is removed and aligned to lower business activity," Santomassimo said.
The company did not provide further updates about the scope of the layoffs on an earnings call Friday.
The Wing, a New York-based coworking startup that made office spaces for women, shut down its operations in August, according to Layoff Tracker.
The company that was founded by Audrey Gelman and Lauren Kassan in 2016 raised more than $117.5 million in funding from investors such as WeWork and Sequoia Capital.
Zeus Living, a furnished home rental company, laid off 64 employees on October 20 as the company continues to seek profitability and sustainable growth, according to the San Francisco Business Times.
The layoffs come approximately 18 months after the startup cut more than 60% of its labor force due to business impacts resulting from COVID.
"Like many companies in our industry, we are not immune to the effects of market volatility, inflation, war, and the possibility of a recession," Anni Jones, director of PR for Zeus, told Insider in an emailed statement.
Zeus has raised more than $150 million from investors like Picus Capital and Y Combinator since it opened in 2015.
Zillow laid off 300 employees as the company pivots to focus on hiring technology and engineering staff, TechCrunch reported on October 26. The layoffs primarily impacted employees in Zillow Offers, its sales team, and staff at Zillow Home Loans, the company's mortgage lending arm.
The move comes nearly a year after Zillow laid off 25% of its workforce after shuttering its iBuying program known as Zillow Offers.
"As part of our normal business process, we continuously evaluate and responsibly manage our resources as we create digital solutions to make it easier for people to move," a company spokesperson told Seeking Alpha. "This week, we have made the difficult — but necessary — decision to eliminate a small number of roles and will shift those resources to key growth areas around our housing super-app. We're still hiring in key technology-related roles across the company."
While most of the layoffs have struck the residential-purchase market, companies focused on rentals haven't escaped unscathed.
In June, the rental marketplace Zumper cut 15% of its staff, mostly in the sales and customer-service departments, The Real Deal reported. It is unclear how many employees were cut.
Axel Springer, Insider Inc.'s parent company, is an investor in Zumper.
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