Real estate firms are announcing layoffs with Redfin cutting about eight percent of its employees while Compass reducing its workforce by 10 percent.
Redfin isn’t providing much work for agents and support employees since demand is falling, and fewer transactions imply less money for larger initiatives.
The reductions are the latest sign that the US housing market is cooling, with mortgage rates rising sharply.
Redfin CEO Glenn Kelman said: “We’re losing many good people today, but in order for the rest to want to stay, we have to increase Redfin’s value.”
“We owe it to everyone who has invested your time or treasure in this company to become profitable, and then very profitable.”
He added divisions that had significant growth during the housing boom are the most hit by layoffs.
Engineers are less needed now that many of the tools required to conduct transactions have been developed.
Kelman saud the business will continue to invest in its web presence, on-the-spot tours, and RedfinNow, its ibuying subsidiary that buys properties in cash, allowing homeowners to sell their homes without advertising them.
Redfin would also reduce its spending on analytics and user research.
As the property market froze in the early days of the pandemic in April 2020, Redfin slashed employees and furloughed more than 40 percent of its agents.
Compass will lay off 450 of its 4,500 employees in the business divisions due to evident signs of slowing economic development, which will exclude agents.
Aside from the layoffs, the firm said that it will pause recruiting, expansion, and mergers and acquisitions until the end of 2022.
Earlier this spring, many mortgage companies curtailed previously extended activities in order to adjust to the massive amount of mortgages that have flooded the market over the last two years.
WHAT IS REDFIN?
Redfin is a real estate brokerage, that helps people buy and sell homes.
Where it is headquartered? The company is headquartered in Seattle, Washington.
How many staff does it have? It currently has around 6,485 employees.
What is its annual revenue? The annual revenue is around $1 Billion.