The quarantine economy is hitting iBuyers hard as Inman reported today that real estate disruptor Opendoor has laid off 35 percent of its staff, approximately 600 employees, citing COVID-19’s unforeseen impact on the U.S. economy and housing.
“Given the shelter-in-place guidelines, we’ve seen declines in the number of people buying, selling, and moving during this time of uncertainty,” CEO Eric Wu said in a statement.
Laid-off staff will receive 16 weeks of benefits coverage and eight weeks of severance pay. Wu announced he would donate his 2020 salary to establish an employee relief fund.
The San Francisco-based based company employs approximately 1,800 individuals nationwide, Inman reported. Opendoor suspended homebuying in mid-March, citing safety concerns, as did their competitors, Zillow, Offerpad and Redfin.
Opendoor attracted big bucks as a real estate startup, raising more than $1 billion in equity, including a significant stake from Softbank and its embattled Vision Fund, which is expected to report a total loss of $24 billion. Softbank stock closed at $19.73 today, down just 3.66 percent from the start of trading.
Back in January, CandysDirt.com broke the story about another real estate disruptor, Door.com, which laid off 37 employees in its Dallas headquarters.
Here’s Wu’s entire statement:
“COVID -19 has had an unforeseen impact on public health, the US economy, and housing. Given the shelter-in-place guidelines, we’ve seen declines in the number of people buying, selling, and moving during this time of uncertainty. In response, we’ve announced to the company that we’ve made the difficult decision to reduce our team by 35%. This was necessary to ensure that we can continue to deliver on our mission and build the experience consumers deserve.
“We are doing everything we can to support our teammates who will be leaving us, including 8 weeks of pay and reimbursement of 16 weeks of health insurance coverage. Also, I’ll be donating my 2020 salary to our Opendoor Employee Relief Fund to help those who may be in more challenging financial or health circumstances due to COVID-19. A number of our executives will also be contributing to the fund to help our impacted teammates.
“I want to thank all of our teammates who’ve shown up every day for our mission, to help our customers, and to change an industry. They’ve helped 75,000 families, couples and individuals move and made our customers’ lives a lot less stressful because of their hard work.
“Though this was difficult news to deliver, our focus here at Opendoor remains the same. We continue to work passionately to simplify the customer experience, transform the entire category, and empower millions of homeowners with the freedom to move.”