Opendoor lays off about 550 workers, or 18% of its workforce • TechCrunch

Opendoor is letting go of about 550 folks, or 18% of the corporate, throughout all features, its co-founder and CEO Eric Wu introduced in a weblog submit right this moment.

The actual property expertise firm is one in every of many actual property tech corporations which have needed to lay off staff in 2022. On-line mortgage lender Higher.com has had a number of rounds of layoffs and in June, Redfin and Compass shed a mixed 900+ staff.

Skyrocketing mortgage rates of interest and inflation are largely guilty for the decreased demand that has led to slowdowns in enterprise at such corporations. For his half, Opendoor’s Wu stated his firm was navigating “one of the crucial difficult actual property markets in 40 years.”

In his weblog submit, the manager stated that his firm over the previous two quarters had labored to cut back its working bills. He wrote: “Previous to right this moment, we scaled again our capability by over 830 positions – primarily by lowering third get together resourcing – and we eradicated tens of millions of mounted bills. We didn’t make the choice to downsize the staff right this moment flippantly however did so to make sure we will accomplish our mission for years to come back.”

Impacted workers will obtain ten weeks of severance pay, with a further two weeks of pay for each full 12 months past two years of tenure. All present healthcare advantages will stay energetic for the remainder of the month, then Opendoor can pay for 3 months of medical health insurance. 

The corporate additionally plans to supply “job transition help” and launch an opt-in expertise listing to assist laid off staff members “join with new alternatives.”

Opendoor went public in late December 2020 after finishing its deliberate merger with the SPAC Social Capital Hedosophia Holdings II, headed by investor Chamath Palihapitiya. The eight-year-old firm first supplied its inventory to the general public at $31.47 per share. On the time of writing right this moment, shares have been buying and selling at $2.48, solely barely greater than the corporate’s 52-week low of $2.26. Which means the corporate is valued at simply $1.56 billion, down from a valuation of $8 billion in 2021.

In terms of enterprise capital, Opendoor final raised $300 million at a $3.5 billion pre-money valuation in March of 2019. Over time, it has raised about $1.3 billion in fairness funding and practically $3 billion in debt financing to finance its dwelling purchases. Buyers within the firm embody Basic Atlantic, the SoftBank Imaginative and prescient Fund, NEA, Norwest Enterprise Companions, GV, GGV Capital, Entry Expertise Ventures, SV Angel and Fifth Wall Ventures, together with others.

Founders embody Eric Wu and Founders Fund common associate Keith Rabois.