Proptech company Ribbon last week laid off 85 percent of its staff, bringing its headcount down to fewer than 30 employees.
About 170 people were cut after a week of suspense for employees, who had been warned by CEO Shaival Shah that a second and potentially large wave of layoffs was coming, according to Business Insider. Shah told employees in a Nov. 15 email that cuts would be “deeper” than initially expected.
Ribbon had previously laid off 139 employees, or 40 percent of its workforce, this summer, which left the company with 200 staff members. In the email to staff, Shah said the company’s situation had “changed considerably” with respect to “ongoing discussions with our funding partners.”
Founded in 2017, Ribbon offers software for brokers and temporary financing for homebuyers to make cash offers. The company said in Sep. 2021 its 18-month outlook was focused on mid-range homeowners competing with large investors and institutional buyers speculating on the single-family rental market.
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The cooling housing market has hit proptech, mortgage and brokerage players hard, with Compass cutting hundreds of employees in June and thousands of layoffs across the mortgage industry by July.
The cuts kept coming in third-quarter earnings. Redfin, which closed its iBuying business earlier this month, announced its second wave of cuts in five months and iBuyer Opendoor announced it was laying off 18 percent of its employees — shortly before reporting a net loss of $928 million in the third quarter.
Industry players have largely cited mortgage rates, which hit a 14-year high earlier this month, for scaring buyers and sellers out of the market.
Things could continue to worsen through the winter, typically the slowest season for the real estate market. Experts have predicted that mortgage rates could rise to 8.5 percent after passing the 7 percent threshold, further constraining the market as the Federal Reserve seeks to clamp down on inflation.
— Holden Walter-Warner