Proptech Opendoor lays off 560 workers, or 22% of workforce

Opendoor will lay off another one in five workers, or 560 employees, in a second round of job cuts since last fall during a troubled real estate market.

The San Francisco-based iBuyer is slashing 22 percent of its workforce after running into headwinds caused by rising mortgage rates and slumping home prices, the San Francisco Chronicle reported.

The company reported a net loss of $1.4 billion last year, compared to a $662 million net loss in 2021.

Opendoor Technologies, as it’s officially known, uses artificial intelligence as part of its business model, which involves fixing up properties and selling them. In November, it laid off 18 percent of its workers, or 550 people, in an effort to save cash. Eric Wu, its then-CEO, called the cuts “necessary” for the firm’s long-term health.

Wu said at the time he was stepping down as CEO and Carrie Wheeler would take over. Wu is now president of marketplace.

The most recent layoffs, which mostly affect operations staff, were made to align costs with “the anticipated near-term market opportunity,” while maintaining technology investments, the company said.

“We’ve been weathering a sharp transition in the housing market — the steepest and fastest rate increase by the Fed in 40 years, the more than doubling of mortgage rates from historic lows, and the hit to home affordability have driven an approximately 30 percent decline in new listings from peak levels last year,” a company spokesperson said in a statement.

Numerous other real estate firms have been hit by downsizings in the past year, including WeWork, Sonder, Zillow and Redfin.

Opendoor has stuck to iBuying — using technology to buy and sell homes — over the last two years, while others have exited the market altogether. 

Zillow announced in November 2021 it would no longer buy and sell homes, citing market volatility and a flawed algorithm. Since then, the company partnered with Opendoor to allow sellers on the platform to request an offer from Opendoor to purchase their home.

— Dana Bartholomew