Seismic shifts in the housing market have shaken Austin proptech startup Homeward, leading it to lay off dozens of employees.
Established in 2018 by Tim Heyl — also the founder of Austin-based real estate brokerage firm the Heyl Group — Homeward is a digital platform aimed at helping home sellers buy a new house before selling their current home.
Homeward can provide credit for buyers to put down all-cash offers and then buy back their home from Homeward once their mortgage is ready. Homeward also promises that if the buyer’s current house doesn’t sell within six months, the company will buy it at a prearranged price.
Last week, however, Heyl wrote a blog post announcing that Homeward would lay off about 20 percent of its workforce following a national dip in real estate demand. Homeward did not respond to requests for comment or say how many employees it currently has, according to the Austin-American Statesman.
“The market has changed dramatically in recent months: high inflation has persisted, interest rates are rising dramatically, and home sales have fallen from historic highs. Coupled with affordability concerns, fewer buyers are seeking homes. There is also less demand for cash-offer products that differentiate buyers in the homebuying process,” Heyl wrote.
“We don’t know how long real estate will continue to soften,” he said, “so we must plan for a less active market.”
In the post, Heyl told the terminated employees that they would receive severance pay based on tenure, as well as health benefits through the end of August — less than three weeks. He also promised outplacement services with its recruiting team, stock options without a vesting cliff, and no non-compete clauses in the severance agreements.
“Despite having a strong financial start to the year, we are currently staffed for more growth than we’re now forecasting,” Heyl said. “This reduction… is necessary for our future success, but that doesn’t make it easier to part with so many of our colleagues. Layoffs carry real consequences for people, and this isn’t a decision we make lightly.”
According to Built in Austin, a tech industry information site focused on the capital city, the company had 400 total employees, including 150 in Austin.
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— Maddy Sperling