Redfin is laying off 13% of its staff and closing its iBuyer service RedfinNow, the company announced this week.
The company will let go of 862 employees and eliminate the roles of another 218 people, Redfin CEO Glenn Kelman said in a message posted early Wednesday to Redfin’s website. Those 218 employees whose jobs are eliminated can choose to remain at Redfin in a different role, Kelman said.
The move comes on the heels of a June layoff at Redfin when the company let go of about 470 employees, an estimated 8% of its workforce at the time.
“A layoff is awful but we can’t avoid it,” Kelman said. “We plan to keep increasing our share of the market, but that market in 2023 is likely to be 30% smaller than it was in 2021. The June layoff was a response to our expectation that we’d sell fewer houses in 2022; this layoff assumes the downturn will last at least through 2023.”
Kelman described RedfinNow as costing too much money with too much risk, given the current housing market. He said the company’s RedfinNow properties are likely to lose $22 million to $26 million this year.
“iBuying is a staggering amount of money and risk for a now-uncertain benefit,” Kelman said. “We’ve tied up hundreds of millions of dollars in houses that you yourself wouldn’t want to own right now … However small our iBuying loss may be compared to others, that loss is still larger than we could afford to bear again.
“All of us, myself included, have to grieve for RedfinNow and other projects now ending. We’ll be ridiculed for thinking they could’ve succeeded. But having strained ourselves to the limit for a long time, we have to acknowledge that, even if we had the money to do more, we’ll be happier and more successful doing less, and doing it well. It will be good to focus on our original calling: getting people a higher, not a lower, price for their homes, at a 1% fee, and supporting people through their entire move, from the mobile application to the agent to the lender to the title specialist.”