Opendoor Cuts 18% of Workforce Amid Historic Real Estate Slump
Opendoor lays off 550 employees as skyrocketing mortgage rates and inflation severely reduce housing demand. The proptech firm's stock plummets from previous highs as it navigates what its CEO calls the toughest market in 40 years.
Opendoor lays off approximately 550 employees, accounting for 18% of its total workforce, across all company functions. This reduction follows a previous effort over the last two quarters that already cut over 830 positions, primarily by reducing third-party resourcing. CEO Eric Wu attributes this necessary downsizing to the need for long-term stability in a difficult economic environment.
The real estate technology company struggles as skyrocketing mortgage interest rates and inflation severely decrease home buyer demand. Wu describes the current landscape as one of the most challenging real estate markets in four decades, a trend that forces other proptech firms like Redfin, Compass, and Better.com to enact similar layoffs throughout 2022.
Opendoor provides severed workers with 10 weeks of base pay, plus two additional weeks for every year of employment beyond two years. The company also covers healthcare benefits for the remainder of the month and pays for three months of continued health insurance, while offering job transition support. Meanwhile, the company's stock drops drastically to $2.48 per share, reducing its valuation to just $1.56 billion from an $8 billion peak in 2021.