Redfin lays off 13% of workforce as trouble comes to real estate industry

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Dive Brief:

  • Redfin laid off 13% of its workforce and shuttered home-flipping service RedfinNow, as of Nov. 9, 2022. 
  • “We’re laying off 862 brilliant, loyal people,” said CEO Glenn Kelman in an internal memo shared by U.S. Securities and Exchange Commission. “To every departing employee who put your faith in Redfin, thank you. I’m sorry that we don’t have enough sales to keep paying you.”
  • Combined with its April 30 wave of layoffs, Redfin has eliminated almost a third (27%) of its workforce. “We’ve also eliminated the roles of 218 employees who can choose over the next few days to stay at Redfin in another role; if all of those employees were to leave, the reduction would be 16% in November and 29% since April,” Kelman said.

Dive Insight:

CHROs told PwC that hiring freezes and layoffs would likely be imminent – and various announcements have proven that true, particularly for certain industries.

“To prosper in a housing downturn that could last at least through 2023, we have to simplify our business,” Mariam Sughayer, Redfin’s head of communications, told HR Dive. “None of this makes a layoff any less heartbreaking. The people leaving Redfin have been brilliant, loyal colleagues.”

This news coincides with Meta’s own Nov. 10 layoff announcement, also amounting to a 13% workforce reduction, and Twitter’s ongoing layoff saga after Elon Musk’s acquisition of the company. 

Specific to the housing market, Redfin joins online real estate company Opendoor, which eliminated 18% of its staff, according to CEO Eric Wu’s November 2 email. Per a Nov. 2 CNBC report, Wells Fargo mortgage brokers are allegedly bracing for layoffs as well. 

Sughayer and Kelman both emphasized that Redfin employees will receive pay severance (10 to 15 weeks depending on tenure), as well as healthcare coverage for three months.

“Having strained ourselves to the limit for a long time, we have to acknowledge that, even if we had the money to do more, we’ll be happier and more successful doing less, and doing it well,” Kelman told Redfin staff in his email. “We’ll show our true colors over the coming year by putting customers first and taking market share, as we have every year through good and bad markets. We’ll show our true colors today by caring for those who are leaving. I won’t pretend it isn’t heartbreaking.”

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