Opendoor is laying off approximately 550 people, or 18% of its workforce, across all functions, its co-founder and CEO Eric Wu announced today in a blog post.
The real estate technology firm is one of many property technology firms that will have to lay off employees in 2022. Better.com, an online mortgage lender, has had multiple rounds of layoffs. And Redfin and Compass both laid off over 900 people in June.
Mortgage interest rates and inflation are largely to blame for the decreased demand. As a result of business slowdowns at such companies. According to Wu, Opendoor is navigating “one of the most challenging real estate markets in 40 years.”
In his blog post, the executive stated that his company had worked to reduce operating expenses over the previous quarters. “Prior to today,” he wrote, “we reduced our capacity by over 830 positions. Primarily through reduced third-party resourcing, and eliminated millions of fixed expenses.” We did not downsize the team lightly; rather, we did so to ensure that we could complete our mission for many years to come.”
Employees affected will receive 10 weeks of severance pay. With an additional two weeks of pay for each full year of service beyond two years. And all current healthcare benefits will continue to be available for the remainder of the month. After which Opendoor will pay for three months of health insurance.
The company intends to launch an opt-in talent directory to help laid-off employees find new jobs. And Opendoor raised $300 million in venture capital in March 2019 at a valuation of $3.5 billion.
Reporter’s note: The information surrounding the company’s stock price on its first day of trading was updated to reflect its correct opening and closing prices.