Fairstead axes at least 10% of workforce: sources
Firm says heavy growth last year resulted in “realignments”
Fairstead cut at least 10 percent of its 700-employee workforce in two rounds of layoffs, one in February and one last week, The Real Deal has learned.
Two ex-employees, speaking on condition of anonymity, said the moves came as the New York-based firm outsourced jobs to India-based subsidiary Enhancor to trim payroll. Some reported having trained the people who replaced them.
“At first I thought I was crazy but then I learned colleagues from other departments had stated they’d been replaced as well after training employees,” one said.
Glassdoor reviews tell a similar story.
“They laid off approximately 10 percent of the company the week before bonus payouts,” one current employee wrote last week. “Those jobs are now being done by incompetent contractors in India who we all trained.”
“They will ship any and every job they can to India when they are able to. I’ve seen them lay off entire teams and almost entire departments,” a former employee wrote in March.
“Layoffs have been handled horribly,” a current employee posted last week. “Moved some jobs to India to some company called Enhancor … It’s a dumpster fire.”
Fairstead did not comment on the number of layoffs or claims around outsourcing. A spokesperson instead referred to “realignments” stemming from robust hiring by the firm last year.
“This is a reality of any high-growth company,” the spokesperson said in a statement. “2022 was the company’s biggest year of growth and we have a higher headcount than we did last year.”
Fairstead, led by CEO Jeffrey Goldberg, describes itself as “people-centered” and “a purpose-driven real estate firm dedicated to building sustainable communities across the country.”
Its website says it has 24,000 units across 28 states. Its projects include Park 79, a former illegal Upper West Side hotel that it converted to affordable senior housing last year. In 2021, in a partnership with Invesco Real Estate, Fairstead paid $350 million for 48 affordable rental buildings in the Bronx.
The firm reported that it is still growing, having recently opened an office in Colorado and another in Florida that is hiring for 40 positions.
Yet ex-employees said Fairstead has yet to dole out back pay to workers let go in February.
A second former employee claimed to be awaiting payment for more than 200 hours of unused vacation, an estimated $17,000.
“It’s going on about two months now and a few of us are in that predicament,” the person said.
One former worker said a third tranche of workers was told this month that they would be let go in June.
The firm’s founders spent the second half of last year trading lawsuits after co-founder Will Blodgett split to start his own firm in 2021.
After Blodgett accused former partners, including Goldberg, of stealing tens of millions of dollars from him last summer, Fairstead fired back with a suit claiming Blodgett lifted the firm’s data, contacts and deal leads.
Despite rising interest rates and a slow sales market, Fairstead has shown few signs of distress. One exception is a portion of a Manhattan multifamily portfolio the firm nabbed in partnership with Blackstone eight years back.
A $271 million CMBS loan covering 11 buildings in the deal went to special servicing in February. In March, Moody’s downgraded the debt, saying cash flow wouldn’t cover payments, and this week, a $50 million mezzanine loan on the portfolio was put up for sale, signaling a risk of foreclosure.