Real estate brokerage firm Redfin said Wednesday that it was laying off 13 percent of its workforce, the company’s latest move to cut costs amid a slowing housing market.
Glenn Kelman, Redfin’s chief executive, sent an e-mail to employees Wednesday morning announcing the latest round of firings and the closure of RedfinNow, the company’s home-flipping service, before the company’s earnings call scheduled for later in the day.
The moves are Redfin’s latest effort to cut back as concerns grow about the housing market. The average rate on a 30-year fixed-rate mortgage rose above 7 percent last month, its highest since 2002, and high borrowing costs have already prompted a slowdown in home sales and construction. Existing-home sales in September fell almost 24 percent from a year earlier, according to data from the National Association of Realtors.
Inflation in the United States has accelerated to its fastest pace since 1982, squeezing the pockets of American consumers, and analysts and corporate executives are concerned about a recession. The Federal Reserve is trying to bring down high prices by raising interest rates, which has driven up the cost of loans like mortgages.
The cooling of the housing market has led to layoffs at other real estate companies. Opendoor, an online homebuying platform, laid off 18 percent of its workforce this month, and the real estate brokerage firm Compass, which laid off 10 percent of its workforce over the summer, said in a September regulatory filing that it was cutting more jobs.
Redfin’s head count, spanning Redfin and its subsidiaries, has fallen by at least 27 percent since April 30, the company said in its e-mail to employees. About 20 percent of employees who lost their jobs are being offered another role within the company, a company spokesperson said in a separate e-mail.
“A layoff is awful but we can’t avoid it,” Kelman said in the companywide e-mail. “We plan to keep increasing our share of the market, but that market in 2023 is likely to be 30 percent smaller than it was in 2021.” He added that the company was expecting that the dip in the housing market would last “at least through 2023.”