Redfin and Compass jointly lay off 900+ employees as mortgage rates continue to rise Vidak For Congress

Redfin’s CEO says, “I said we wouldn’t fire people if we didn’t have to. We have to.’

Redfin and Compass jointly lay off 900+ employees as mortgage rates continue to rise Vidak For Congress 1

the housing market has taken a huge blow this year as mortgage rates have risen and homeowners are cutting back on their purchases.

The latest victims in the proptech world are Redfin and Compass, who both announced layoffs today that together numbered about 920 people.

In an email, a Redfin spokesperson told Vidak For Congress that the company is resigning about 470 employees today after May, demand was 17% below expectations.

Meanwhile, a Compass spokesperson confirmed to Vidak For Congress that the company is cutting about 10% of its staff, or about 450 people who tell Vidak For Congress: “Due to the clear signs of slowing economic growth, we have taken a number of measures to protect our business and costs, including the difficult decision to reduce the size of our workforce by approximately 10%.”

Both Redfin and Compass help people find and buy homes.

Mortgage Interest Rates rose to nearly 6% this week, significantly higher than the rates below 3% in 2021. Needless to say, the idea of ​​buying a house is much less attractive than in years past. Combine that with overheated markets where prices have risen dramatically, and many potential home buyers are pausing their plans.

In a blog postGlenn Kelman of Redfin said his company would host a short meeting to address the move and that managers would call affected employees directly.

He wrote:To all the departing people who have placed your trust in Redfin, I am sorry we cannot live up to our commitment to you. With demand from May 17% below expectations, we don’t have enough work for our agents and support staff, and less sales means we have less money for projects at headquarters.”

Kelman went on to say that the company is offering fired colleagues a 10-week base salary, with an additional week’s pay for every 12 months of service after a year, up to a maximum of 15 weeks’ pay. Redfin said it is also footing the bill for three months of health care coverage for affected employees.

“That should give you until the end of the summer to find work,” he added. “..I said we wouldn’t fire people if we didn’t have to. We have to.”

The director then acknowledged the irony of resigning despite raising hundreds of millions of dollars.

“But mortgage rates rose faster than at any time in history. We could be facing years, not months, of less home sales, and Redfin still intends to thrive,” he wrote. I don’t know what it does… We owe it to everyone who has invested your time or money in this business to become profitable, and then very profitable.”

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