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Editor’s note: This story was updated on Thursday, Feb. 2, 2023.
The rapid run-up in mortgage rates this year created uncertainty for many real estate companies, forcing many to lay off workers as forecasts for 2022 and 2023 have grown increasingly dire.
While mortgage and mortgage-adjacent companies were among the first to initiate layoffs this year, economic uncertainty has since led brokerages including Compass, Keller Williams and RE/MAX to follow suit, as well as iBuyers like Opendoor and other ancillary service providers, such as Adwerx and Ribbon.
The downturn kicked off as the end of stimulus measures, which had brought interest rates to historic lows during the coronavirus pandemic, put a screeching halt to the profitable mortgage refinancing boom. By May, Fannie Mae was predicting a slowdown.
Then in October, with mortgage rates still rising and sales growing ever more sluggish, Fannie went a step further and predicted home prices would actually fall nationally in 2023. But economists at the mortgage giant have also forecast that mortgage rates could ease this year as the Fed signals it’s almost done hiking short-term interest rates.
While some companies that provide mortgages, title insurance and closing services have “right sized” to the new expectations, the job market remains strong. At 3.7 percent in November, unemployment is below historic trends, and with 10.3 million job openings in October, many employers are still having a hard time filling openings.
Here’s a comprehensive roundup of the companies that have laid off workers, scaled back hiring or offered buyouts to employees to downsize in recent months.
Adwerx laid off 40 employees on Thursday, July 7 as the company aimed to scale back on “new initiatives,” according to a spokesperson for the digital marketing platform and a series of Linkedin posts from departing employees.
Each outgoing employee received a severance package, Adwerx Chief Marketing Officer Dan London said. No additional layoffs are planned and Adwerx expects to retain its current workforce of roughly 150 employees as it focuses on growth.
Anywhere conducted what it described as a “meaningful” layoff on Jan. 9. The company didn’t say how many positions it cut in total, but did reveal that since June 2022 it has reduced its workforce by 11 percent via multiple rounds of layoffs.
At the same time that it cut jobs in January, Anywhere also axed its iBuyer, RealSure. That move and the layoffs were part of a cost-reduction plan that was taken in response to what the company described as “worsening trends in the housing market.”
An end-to-end provider of mortgage financing, real estate brokerage services and title and closing services, Better Holdco Inc. founder and CEO Vishal Garg made international news in December when he laid off 900 employees over a Zoom call. After the departure of senior executives, including Christian Wallace, the head of Better’s real estate brokerage subsidiary, Better Real Estate LLC, Better shed another 3,000 workers in March. As of May 15, the company employed 2,900 workers, a 72 percent drop from more than 10,000 employees at the end of 2021.
Mortgage tech provider and title insurance provider Blend Labs Inc. has slashed about 860 jobs or 40 percent of its workforce in four rounds of layoffs spanning nine months. The workforce reductions started with an announcement in April that Blend would lay off 200 employees as rising mortgage rates curtailed refinancings. In August, the company announced it was eliminating 220 more jobs, mostly from its Title365 business, and offshoring work to India. And on Nov. 10, Blend announced another 100 layoffs and said it had written off the remaining value of Title365’s goodwill and customer relationships.
Blend kicked off the new year on Jan. 10, 2023, by announcing 340 more job cuts impacting Blend Title and corporate operations in research and development, sales and marketing and general and administrative functions. All told, Blend says its cost-cutting measures will trim about $100 million in annual expenses.
Before going public in 2021, Blend paid $422 million to acquire a national title insurance and settlement services provider, Title365, from Mr. Cooper Group. The deal helped Blend boost 2021 revenue by 144 percent, but it also helped drive a 129 percent increase in operating expenses.
Compass founder and CEO Robert Reffkin announced in mid-June that his company was laying off 10 percent of its workforce or about 450 employees. All of the layoffs involved full-time staffers, rather than agents. In an email to Compass workers, Reffking explained that “the economic environment has consistently worsened over these last few months.” He went on to cite rising inflation and mortgage rates, as well as a consensus among industry leaders that a recession could be coming. In addition to letting go of employees, Compass also opted to halt further expansion for the time being.
Commercial real estate giant and would-be residential disruptor CoStar cut 100 jobs in early December. The layoffs were part of a restructuring that aimed to integrate the Homes.com and Homesnap brands. In a statement, CoStar said the eliminated positions were duplicative roles, though the company also said it has plans to continue increasing total staff numbers in the near future.
Divvy Homes, valued at $2 billion as of August 2021, reduced its employee count in September 2022 by 12 percent, or 40 people, in response to the changing housing market, according to Catherine Cuello-Fuente, a communications strategist who once worked for the lease-to-own company. Divvy declined to comment to Inman, but in a statement to Aim Group, Kyle Zink, vice president of marketing and communications, cited “worsening economic conditions.”
Divvy purchases homes on behalf of its customers and rents the homes back to them while the customers continue building equity on the properties. Initially, the renter contributes 1 to 2 percent of the home value to the purchase, then about 25 percent of each monthly payment that follows goes toward saving for a down payment.
Divvy’s model has come under scrutiny of late by a number of its customers and affordable housing proponents.
Digital title insurance, escrow and closing provider Doma has laid off 561 workers in 2022, as it races to adapt technology the company pioneered for mortgage refinancings and apply it to purchase loans taken out by homebuyers. Doma announced an initial round of layoffs in May affecting 310 employees — about 15 percent of the company’s workforce — after rising mortgage rates cooled its customers’ mortgage originations. Combined with layoffs of another 250 workers announced in August, Doma says it expects to realize annual cost savings of $70 million a year.
First Guaranty Mortgage Corp.
Citing “significant operating losses and cash flow challenges,” Plano, Texas-based non-QM lender FGMC cut 76 percent of its workforce — 428 employees — on June 24, leaving not only employees but borrowers and lender partners in the lurch.
Seattle-based end-to-end homebuying services provider laid off 20 percent of the company’s workforce on July 20, citing “the largest interest rate hike in nearly 30 years” and its impact on housing demand. “The extremely difficult, but necessary, step we took today was necessary to address market conditions that have not been seen in the recent past,” the company said.
The company conducted a second round of layoffs on Nov. 9. Flyhomes didn’t say how many employees it cut in the second round of layoffs. However, in its announcement the company did point to “rapidly shifting market conditions” that required taking “painful steps” to “ensure the long term trajectory of the company.”
Guaranteed Rate — known to many real estate agents for its joint ventures with franchising giant Realogy Holdings Corp. and national brokerage firms @properties and Compass — made a big move in early 2021, acquiring Stearns Holdings LLC “with the ultimate goal of becoming the nation’s number one lender.” In January 2023, Guaranteed Rate pared down its ambitions, laying off 348 employees and closing down its third-party wholesale channel, Stearns Wholesale Lending.
Utah-based flat-fee brokerage Homie laid off 119 employees in February, about a third of its workforce, saying limited housing inventory had “created a challenging real estate market for home buyers.”
The company laid off several dozen more employees, and lost its CEO, in early October as market conditions continued to prove challenging.
Agent referral startup HomeLight, which achieved unicorn status last year after raising hundreds of millions of dollars, announced on June 29 that it was cutting jobs. A company spokesperson told Inman that 19 percent of the company’s workforce was affected.
The nation’s third-largest wholesale mortgage lender Ann Arbor, Michigan-based Homepoint confirmed to Inman on Sept. 2 that it planned to lay off “hundreds” of workers. According to Worker Adjustment and Retraining Notification (WARN) Act notices Homepoint filed with officials in Arizona, Florida, Michigan and Texas, the layoffs will affect at least 913 employees in those four states alone. Parent company Home Point Financial Corp. said it expects those and other cost-cutting measures to reduce annual expenses by $100 million.
Power buyer Homeward announced Aug. 10 that it was shedding 20 percent of its workforce amid the ongoing market slowdown. The company declined to confirm the exact number of people it was letting go, but with approximately 600 employees on the payroll prior to the announcement, the move puts the number of layoffs somewhere in the neighborhood of 120.
The decision was based partly on how market conditions had harmed its “buy with cash” offering, Tim Heyl told employees in a letter announcing the move. The company’s “buy before you sell” product, by contrast, was maintaining interest and prospects for growth, Heyl wrote.
Homeward announced a second round of layoffs on Nov. 16. The company once again cited the market slowdown and said that 25 percent of the company would ultimately be leaving — putting the cuts on par with the previous round in August. Additional employees were also slated to experience furloughs and repositions.
Real estate franchise giant Keller Williams laid off 150 recent recruits from its lending arm, Keller Mortgage, in October 2021, and handed out more pink slips at the end of May 2022 as part of a restructuring of the company’s operations and support groups. Restructuring of the mortgage operations group continued in October with what one affected employee said were an additional 60 layoffs. Even as it laid workers off, Keller Mortgage said it was committed to long-term growth and advertised openings for loan officers to work remotely from anywhere in the U.S.
Keller Williams Realty
In addition to cuts at Keller Mortgage, Keller Williams’ franchise arm has also made cuts over the past 12 months. The company completed two rounds of layoffs in July and August, with the first round impacting ten Keller Williams University and Connect Live employees. The second round hit the franchisors’ social media and marketing teams, with 23 staff members being laid off three days before Keller Williams’ annual training conference Mega Camp.
A San Francisco-based provider of financing to house flippers and long-term real estate investors, Kiavi downsized on July 13, just weeks after offloading more than $200 million in loans to Wall Street investors.
One year after hiring Goldman Sachs to take the company public at a proposed valuation of $2 billion, Power Buyer Knock announced layoffs affecting 115 employees in March or about 46 percent of its workforce. Having stepped away from plans for IPO and closing a smaller $220 million funding round with private investors, Knock said downsizing would allow it to continue with plans to expand into 90 markets by the end of the year.
LoanDepot slashed its payroll by 5,200 employees through layoffs and attrition during the first three quarters of 2022 as rising interest rates gutted the company’s profitable refinancing business. LoanDepot CEO Frank Martell, who took the CEO reins from company founder Anthony Hsieh in April, is working to get the company back to breakeven by cutting $400 million in annual expenses. In addition to trimming the company’s payroll, Martell announced in August that loanDepot would be shutting down its wholesale lending business.
Rising mortgage rates are making what has traditionally been Mr. Cooper’s main business — collecting mortgage payments from nearly 4 million borrowers — much more profitable. But they’re also limiting the company’s ability to originate new mortgages, prompting the company to lay off 250 workers during the first quarter of 2022, another 420 workers during the second quarter and 800 workers during the third quarter. Mr. Cooper started the year with 8,200 employees, so the 1,470 announced layoffs to date mean the company has downsized by about 18 percent since then.
After almost single-handedly creating the category, remote online notarization startup Notarize laid off 110 employees on June 15, with CEO Pat Kinsel citing economic uncertainty and access to future investment capital.
Offerpad laid off about 7 percent of its workforce in September, and staffing is down about 12 percent from peak employment due to a hiring pause instituted earlier this year, CFO Mike Burnett said on the company’s third-quarter earnings call.
Opendoor announced on Nov. 2 that it was cutting about 550 jobs or roughly 18 percent of its workforce. The cuts came amid increasing pressure on iBuyers thanks to sluggish price appreciation and on the eve of Opendoor’s third-quarter earnings report. In addition to cutting jobs, Opendoor also cut ties with third-party vendors and enacted other cost-saving measures.
A vertically-integrated power buyer that provides services in 13 markets, Orchard announced on June 23 that it was laying off about 10 percent of its workforce, or nearly 100 employees, across a mix of departments. In an internal note to employees, CEO Court Cunningham said the layoffs were driven by “mounting economic uncertainty” and the need for Orchard to “get to profitability as soon as possible, so that we control our own destiny.” Even as it downsized, the company said it would continue to seek to fill about 50 openings in its mortgage, real estate brokerage, marketing and finance departments.
Orchard carried out a second, even larger round of layoffs on Nov. 17. This round saw the company cut 180 positions or about 23 percent of the company. In a LinkedIn post announcing the layoffs, Orchard said the housing market was experiencing “one of the biggest disruptions” in history.
Second home co-ownership platform Pacaso, founded by former Zillow executives Austin Allison and Spencer Rascoff, announced on Oct. 11 that it had reduced its staff by 30 percent.
“Early in 2022, the capital markets—venture capital firms and public market investors—were enthusiastically funding growth stage companies,” Allison said in a company blog post. “Our business expansion and headcount were designed for this hyper-growth environment, which was appropriate for the market conditions at the time. Fast forward ten months and we now must prepare for a recession. This change reverts our headcount back to January 2022 levels, and right-sizes our team for the immediate road ahead.”
The nation’s second-biggest mortgage lender, Pennymac laid off 236 workers from six locations in California in May, citing falling demand for home loans. Pennymac employed 7,208 workers worldwide at the end of last year.
California-based real estate brokerage and power buyer Reali announced Aug. 24 that it was shutting down and would lay off most of its workforce on Sept. 9, citing “challenging real estate and financial market conditions and [an] unfavorable capital-raising environment.” Although Reali did not say how many workers would be affected, the California Department of Real Estate listed 249 real estate salespersons affiliated with Reali Inc.’s San Mateo-based real estate brokerage business, and Reali Loans Inc. employed nine mortgage loan originators working out of two active branch locations, according to records maintained by the Nationwide Mortgage Licensing System and Registry. Reali said a small team of employees would continue to support real estate transactions in progress through the end of the year.
Real estate portal Realtor.com announced layoffs on Sept. 8, exactly one month after parent company Move’s fourth-quarter earnings call that revealed single-digit revenue growth amid a shifting housing market. Realtor.com CEO David Doctorow said the layoffs came after “much consideration and exploration of alternative scenarios” to protect the company’s growth and longevity.
A Realtor.com spokesperson declined to share specifics of the layoffs, including how many employees and contractors were impacted and which departments were hit hardest; however, they said everyone impacted will receive “generous severances” that include COBRA healthcare coverage, career counseling and outplacement services.
The online search portal turned full-service real estate brand shed 8 percent of its staff on June 14. CEO Glenn Kelman attributed the move to a 17 percent drop in demand for May. The layoff was expected to impact nearly 500 people, including agents, engineers, recruiters, trainers and other support staff.
Redfin’s bid to expand its presence in mortgage lending by acquiring San Francisco-based Bay Equity Home Loans for $135 million also meant pink slips for 121 existing workers in sales support, capital markets and operations at Redfin’s existing mortgage business.
Redfin cut another 13 percent of its staff in November when it announced that it was ending RedfinNow, the company’s iBuying program.
RE/MAX announced on July 7 that it plans to discontinue its booj technology platform, which launched in 2019. As a result, the company also revealed plans to cut its staff by 17 percent by the end of 2022.
Cuts will take place in tech-focused departments. In place of booj, RE/MAX has struck up a partnership with technology provider Inside Real Estate to offer the kvCORE platform.
REX Real Estate
After implementing two rounds of layoffs last year, discount brokerage REX Real Estate shuttered two offices in Texas in May. Although reports suggested that REX Real Estate had shed all of its agents and was preparing to shut down, REX co-founder and COO Lynley Sides told Real Trends that the company has pivoted to brokering deals for institutional landlords in California and Florida.
After expanding into eight new states and more than doubling its market footprint in 2022, Power Buyer Ribbon announced on July 28 that it would lay off 136 employees or about one-third of the company’s workforce. Company co-founder and CEO Shaival Shah said Ribbon, which had planned to be in 25 states by the end of the year, would continue expanding into an unspecified number of new markets.
Ribbon made an even bigger cut in November, effectively reducing its workforce to a skeleton crew.
Rocket Companies Inc.
In a bid to avoid layoffs, the nation’s biggest mortgage lender Rocket Companies Inc. made buyout offers in April to approximately 2,000 workers. If accepted, the buyouts are expected to save Rocket about $180 million per year, executives said on a first-quarter earnings call in May.
Three days after making company history with the sale of its first real estate NFT (non-fungible token), San Francisco-based tech startup Roofstock laid off 20 percent of its workforce on Oct. 21. The company declined to share how many employees it laid off and whether they offered severance packages.
Side’s most recent layoffs took place in mid-October. The company cited “planned technology advancements that have increased our efficiency, as well as consideration of the broader macroeconomic climate.” The company did not say how many employees lost their jobs.
Side also laid off employees in June. Saying it expanded faster than it could train, support and develop recent hires, real estate technology startup Side notified about 10 percent of its employees in late spring that they were out of a job.
Side, which provides branding and technology to independent brokerages and often serves as the broker of record for high-performing agent teams, said last summer that it was on track to go public after achieving unicorn status and raising more than $250 million in funding.
Sprout Mortgage, which claimed to be the largest provider of “non-Qualified Mortgages” in the U.S., shut down without warning on July 6 leaving more than 300 employees out of work. Sprout Mortgage was the second non-QM lender to implode in as many weeks, following in the footsteps of PIMCO-backed First Guaranty Mortgage Corp., raising questions about the viability of a small but growing corner of the mortgage business that largely serves self-employed borrowers.
Property marketplace Sundae, which lets homesellers sell their properties as-is to investors without hiring a real estate agent, announced layoffs in June affecting 15 percent of the company’s workforce, primarily in its newest markets.
A mortgage fintech launched by former Zillow executives with an exclusive focus on purchase loans, Tomo cut its workforce by nearly one-third on May 31. Citing a “recent shift in the mortgage and venture capital markets due to the rapid increase in interest rates,” CEO Greg Schwartz said Tomo was postponing, for now, plans to expand into additional markets.
Portland-based short-term rental platform Vacasa announced on Jan. 24 that it was shedding 17 percent of its workforce, a layoff equivalent to about 1,300 employees.
The company said the cuts would roll out through mid-year, and they were expected to cost the company about $5 million in severance payments.
Vacasa CEO Rob Greyber, who was appointed to his role in August 2022, told employees in an email that those affected by the layoffs had already been notified. He also provided an insight into the company’s outlook, saying it would focus on adding homes to the platform and improving its software.
Wells Fargo, which has seen its mortgage production fade as it closes retail branches, laid off an unspecified number of workers in its home lending division in April, as a “result of cyclical changes in the broader home lending environment,” the company told Inman. In reporting first-quarter earnings, Wells Fargo executives said they plan to cut expenses with revenue from home lending down 33 percent from a year ago to $1.49 billion.
The banker laid off an unspecified amount of employees in the “hundreds” in December, before laying off another 140 workers in February as it pulled out of the correspondent mortgage business.
Portal and lead generation giant Zillow laid off 300 workers in October. The cuts came from a variety of the company’s verticals, including Zillow Offers, Zillow Closing Services, Zillow home loans and others. In a statement, the company said that it had “made the difficult — but necessary — decision to eliminate a small number of roles and will shift those resources to key growth areas around our housing super-app.”
Online rental search company Zumper cut 15 percent of its staff in early June, proving that the rental market is not immune from the economic turmoil rocking the industry. Sources said all teams at the company that had about 300 employees were impacted. A Zumper spokeswoman cited “macroeconomic and market factors” for the decision.