Homeward doesn’t feel like home to 20 percent of its staff who were laid off by the power buyer.
The Austin-based company cut a fifth of its staff in response to the housing slowdown, Inman reported. The company employed about 600 people prior to the cut, meaning around 120 were affected.
“The shifting market and decrease in contract activity have resulted in more headcount than necessary — we have to adjust our business to accommodate the new reality we’re in,” a company spokesperson said in a statement.
The move comes two months after Homeward founder Tim Heyl expressed optimism to employees that the company wouldn’t follow in the footsteps of rivals Knock and Orchard, which had their own cuts in recent months. But Heyl this week walked back the reassurance, telling employees the “continuing acceleration and severity of the market shift has forced us to consider deeper changes to our business.”
Affected employees will receive severance based on time with the company. Most affected employees will also have non-compete clauses waived.
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The homebuying startup’s key offerings included a “buy before you sell” program and a “buy with cash” program, loaning prospective buyers money to make cash offers on a home and promising to buy their old home if they can’t sell it. The company had one of the largest proptech funding rounds of 2020, raising $105 million.
But buyers have started to retreat from the housing market due to low inventory, high prices, higher mortgage rates and general economic uncertainty. Fewer buyers means fewer people wanting to take advantage of homebuying programs.
Despite the layoffs, Homeward maintains it is poised for long-term growth.
The size of the startup’s layoffs rank near the middle of significant cuts by power buyers in recent months. In March, homebuying startup Knock ditched its plans for an IPO and laid off roughly 46 percent of the staff. More recently, Ribbon laid off about one-third of its staff, while Orchard laid off 10 percent of its workforce.
— Holden Walter-Warner