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Amid a bruising autumn for property technology companies, power buyer Ribbon announced Monday that it was cutting most of its staff and continuing on with just a skeleton crew running the company.
In an email on Monday, a company spokesperson confirmed to Inman that the firm had laid off workers and would now “be a company of less than 30 people.” The spokesperson did not say how many people were actually laid off. However, a round of layoffs in July cut 136 positions, which at the time was about one third of Ribbon’s total workforce. If those numbers were still accurate, Ribbon would have had more than 250 employees before this latest round of layoffs.
Business Insider reported that a total of 170 people lost jobs in Monday’s cuts. Inman has requested additional information from the company and will update this story with any response. However, whatever the exact number, Monday’s layoffs appear to represent more than 80 percent of Ribbon’s total workforce.
Ribbon CEO Shaival Shah alerted employees at the company of impending layoffs last week, according to an email obtained by Business Insider. The email reportedly said that Ribbon’s “situation has changed considerably” since a previous warning of layoffs due to “discussions with our funding partners.” The result was “uncertainty” and a “deeper” reduction in the workforce.
The spokesperson’s initial statement to Inman further noted that “impacts were felt in every department.” It went on to describe the layoffs as a “re-balance.”
“Ribbon’s path forward is rooted in focusing on concepts that add more dexterity to the portfolio of homeownership offerings, to complement our flagship RibbonCash offerings,” the statement continues. “Ribbon’s pause of RibbonCash is temporary.”
The RibbonCash comment is a reference to the company’s decision earlier this month to pause its cash offer service. At that time, one source outside the company told Inman Ribbon had lost access to a credit facility and could no longer fund home purchases.
Ribbon’s sweeping layoffs come just days after fellow power buyers Orchard and Homeward also laid off large numbers of workers. Such companies have suffered from the broader slowdown in the housing market, which hit as consumers have contended with rapidly rising mortgage rates. The slowdown has resulted in thousands of job losses across the mortgage, brokerage and real estate technology sectors.
But power buyers are also having a particularly rough ride right now because their business model was designed around giving consumers an edge in a highly competitive market.
That pitch made sense in 2020 and 2021, when would-be homebuyers were fighting brutal bidding wars and often missing out on their dream homes. But it has become a shakier proposition as the market has shifted in favor of buyers.
In Ribbon’s case, the company had been a fundraising and geographically expanding star. In 2019, for instance, the company raised $30 million in cash and $300 million in debt to fund growth. Last September, the company raised another $150 million.
It was not clear Monday how the company might forge ahead with such a dramatically reduced workforce. However, the spokesperson’s statement to Inman did note that laid off employees comprised “an incredible team.”
“Every single person has been an integral part of what we’ve achieved,” the statement added. “This team deeply cares for one another — and for the work we committed to taking on.”
Email Jim Dalrymple II