The real-estate industry has been struggling for a long time. The deals that used to be profitable for the industry and home purchases that were affordable for everyday people have been slammed by higher borrowing costs. The real-estate world has seen a lot of layoffs because of the Federal Reserve's aggressive interest-rate hikes. The industry used to be flying high with home-price appreciation, increasing rents and plentiful funding for proptechs. Better's layoffs at the end of last year started the downsizing. It was an abrupt move that came amid expectations for a big slowdown in 2022. There are signs of distress in the office market and among homebuilders. An attrition rate as high as 30% is anticipated by the Mortgage Bankers Association. Demand for mortgage loans is at its lowest level in 17 years, and more industry jobs are likely on the line. Real estate marketplace giant Zillow and consumer lender Finance of America were among the latest casualties. At companies that have axed more than once, Insider is keeping track of where job cuts are taking place. Below are the companies with layoffs. Are you aware of other real estate tech or mortgage layoffs? Do you know if you were affected by them? Better laid off people earlier than most of the companies. In December of last year, CEO Vishal Garg cut 900 employees through a teleconference. Better has hired 7,000 people since the beginning of the Pandemic. In March the company will cut 3,000 more employees. Insider reported that some employees were laid off when their bank statements received direct deposits for severance payments or when they lost access to their computers. The company has said that it still plans to go public this year. Garg, Better, and the blank check company trying to take the mortgage company public have received inquiries from the SEC about their business operations. In June, Bungalow laid off 75 people, or 34% of its workforce, according to the Layoffs Tracker. Deer Park Road Management led a group of investors that invested in the company last year. $600 million is the value of the round. In June, the residential broker laid off 10% of its workforce. Real-estate agents who are independent contractors were not included in the layoffs. In the two years since it went public, the company has lost 80% of its value and trades below $5 a share. The company plans to combine some offices and stop its expansion and acquisition plans. The laid-off employee talked about their experience. A rent-to-own real estate company in September laid off 40 employees, representing more than 12% of its workforce. The company was founded in San Francisco and has raised more than 1.5 billion dollars. "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 told Insider. The macro environment is likely to be challenging for a long time. To reflect the new reality, we had to adjust our headcount. The Dallas Morning News reported that First Guaranty Mortgage Corp., a Plano, Texas, lender, laid off 80% of its employees and stopped making new loans in June, fueling speculation that the company was going to go bankrupt. Pimco supported the company. The company has more than $473 million in debt and filed for Chapter 11 protection. The company, which originated $11 billion in mortgages last year, had projected only $5 billion to $6 billion in this year's mortgage originations. Homeward laid off 20% of its workforce in August due to a drop in housing transactions. According to a report by The Austin-American Statesman, Tim Heyl, Homeward's CEO, wrote in an email to employees that they need to plan for a less active market. The company has raised more than half a billion dollars since it was founded. The Series B round of Homeward raised $136 million. On November 2, Opendoor laid off over 500 employees. Opendoor is the largest home-flipping company in the US. It's also known as an instant buyer, which means it buys up single- family homes across the country and resells them for a profit. About 18% of Opendoor's workforce was affected by the move. Opendoor gave laid off employees job transition services and a package that included at least 10 weeks of pay. "We did not make the decision to downsize the team lightly but did so to ensure we can accomplish our mission for years to come," Opendoor CEO EricWu wrote in a post. It doesn't take away the difficulty, frustration, and sadness that comes with downsizing. According to The Real Deal, Pacaso laid off 30% of its workforce due to concerns about a global recession. Pacaso has raised more than 1.5 billion dollars in seven funding rounds since it was founded. The company received $125 million in a Series C round in September of 2021. In October, 80 employees were laid off fromPennymac's locations in California. The layoffs came after the company laid off almost 450 employees. The first and second rounds were announced in March and May, respectively. According to a memo posted on the company's website, over 800 employees were laid off on November 9th. In June, the company laid off six percent of its workforce. The company's employment has fallen since April 30, according to the memo. Glenn Kelman wrote that a layoff is awful. The market in 2023 is likely to be 30% smaller than it was in 2021. The company said on November 9 that it was shutting down its home flipping business. In June, Sonder laid off 21% of its corporate employees and 7% of its frontline hotel staff. Sonder has short-term rental properties in apartment buildings that are also hotels. The layoffs were part of a plan to prepare the company for changing market dynamics that value profitability over growth, according to the CEO. The company's chief technology officer left earlier in the month, according to a SEC filing. The company confirmed that it laid off approximately 3% of its workforce on October 21. Rob Greyber took over as CEO less than a month ago. About 25 salespeople received pink slips during the summer. Since going public, Vacasa has been unprofitable. The company lost $2 million in adjusted earnings in the third quarter, but it was better than its projected loss. "We do not take these decisions lightly, but we continuously assess our business, strive to maximize our resources and teams to be efficient and align with our priorities," a company spokesman said. According to the San Francisco Business Times, Zeus Living laid off 64 employees on October 20 as the company continued to seek profitability. The layoffs come 18 months after the startup cut more than half of its labor force due to the effects of COVID. "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 email. Since opening in 2015, Zeus has raised more than $150 million from investors. The company laid off 300 employees as it pivoted to hire technology and engineering staff. The layoffs mostly affected employees in the company's mortgage lending arm. Nearly a year ago, Zillow laid off 25% of its workforce after shutting down its iBuying program. "As part of our normal business process, we continuously evaluate and manage our resources as we create digital solutions to make it easier for people to move," a company spokesman said. The decision to eliminate a small number of roles and shift those resources to key growth areas was difficult but necessary. Key technology-related roles are still available.
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