Opendoor lays off about 550 employees, or 18% of its workforce • TechCrunch
Opendoor co-founder and CEO Eric Wu announced Blog post today.
The real estate tech company is one of many real estate tech companies that have had to lay off workers in 2022. Online Mortgage Lender Better.com He had multiple rounds of layoffs and in June, Redfin and Compass Shed 900+ factor combined.
The skyrocketing mortgage interest rates and inflation are largely the reason for the drop in demand that has slowed business in such companies. For his part, Opendoor’s Wu said his company is navigating “one of the most challenging real estate markets in 40 years”.
On his blog, the CEO said that his company has worked over the past two quarters to reduce operating expenses. he wrote: “Prior to today, we had reduced our capacity by more than 830 jobs – primarily by reducing third-party resources – and eliminated millions in fixed expenses. We didn’t take the decision to downsize the squad lightly today but we did so to ensure we can fulfill our mission for years to come.”
Affected employees will receive ten weeks of severance pay, with an additional two weeks of pay for each full year after two years of service. All existing health care benefits will remain active for the rest of the month, and then Opendoor will pay for three months of health insurance.
The company also plans to offer “job transition support” and launch a subscribeable talent directory to help laid-off team members “connect with new opportunities.”
Opendoor went public in late December 2020 after its completion planned merger With SPAC Social Capital Hedosophia Holdings II, headed by investor Chamath Palihapitiya. The eight-year-old company offered its shares to the public for the first time at $31.47 per share. At the time of writing today, Shares have been traded at $2.48, slightly above the company’s 52-week low of $2.26. That means the company is valued at just $1.56 billion, down from a valuation of $8 billion in 2021.
When it comes to venture capital, Opendoor last raised $300 million in $3.5 billion valuation before cash In March of 2019. Over time, it has raised about $1.3 billion in equity financing and about $3 billion in debt financing to fund its home purchases. Investors in the company include General Atlantic, SoftBank Vision Fund, NEA, Norwest Venture Partners, GV, GGV Capital, Access Technology Ventures, SV Angel and Fifth Wall Ventures, among others.
Among the founders are Eric Wu and General Partner of the Founders Fund Keith Rabois.