A year after shooting to unicorn status, Side appears to be sinking back to earth amid a volatile housing market.
The San Francisco-based brokerage laid off about 10 percent of its workforce, Inman reported. The layoffs are similar to other companies weathering the recent rise in mortgage rates, but are a difficult pill to swallow after an explosive year for the company.
Side CEO Guy Gal cited market volatility as a major reason for the layoffs in an email sent to staff and obtained by Inman. Gal also suggested a mistake the company may have made during its rapid growth.
“We expanded the team faster than we could train, support and develop everyone to meet the demands of changing roles and processes,” Gal said in the email to employees.
The expansion push came during a period of major growth for the company. Last March, the white-label brokerage raised $150 million in a Series D round, reaching a valuation above $1 billion. Months later, the valuation more than doubled to $2.5 billion after Tiger Global Management led a $50 million round.
Side provides a range of technology tools and support teams for its small group of agents. The company provides each agent who starts a brand at the brokerage a business manager, while in-house staff recruits new agents for partners’ brands. If partners leave within the first two years, Side keeps their brands.
Earlier this year, Side snatched John Wollberg away from Brown Harris Stevens to work as a managing broker overseeing the company’s expansion into New York. The company has also been on track to go public, speeding towards an IPO.
Instead, it is joining the ranks of companies choosing to reduce headcount as the housing landscape begins to shift after two years supercharged by the pandemic.
Digital mortgage lender Tomo laid off nearly one-third of its workforce only three months after an equity capital injection. A total of 44 employees were let go, which management attributed to headwinds in the mortgage and venture capital markets.
Better.com has laid off thousands since interest rates began rising last fall. In the proptech field, mortgage-related startups have been hit particularly hard; in April, digital lender Blend Labs laid off 200 employees, or roughly 10 percent of its staff.
In May alone, some 16,000 tech industry employees were laid off, according to the website layoffs.
[Inman] — Holden Walter-Warner