The real estate companies making layoffs so far in 2022

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Editor’s note: This story was updated on Tuesday June 21, 2022

The rapid rise in mortgage rates this year has caused uncertainty among many real estate companies, with some already laying off employees, as economists revise forecasts for home sales this year and next.

With few exceptions — like Homie, REX Real Estate, and Side — the layoffs were largely limited to companies that provide mortgages and mortgage-related services like title, underwriting, and technology.

The end of stimulus measures that pushed interest rates to historic lows during the pandemic has brought the boom in profitable mortgage refinancing to an abrupt halt, with Fannie Mae economists forecasting mortgage lending to fall by 40 percent this year .

But even if some companies offering mortgages, home insurance and closing services are “right sized” for the new expectations, the job market remains strong. At 3.6 percent in April, unemployment is below historical trends and with the government reporting 11.4 million job vacancies, many employers are still struggling to fill vacancies.

Here’s a recap of some of the companies that have laid off employees, scaled back hiring, or offered buyouts to downsize staff in recent months.

Better

Vishal Garg, founder and CEO of Better Holdco Inc., an end-to-end provider of mortgage financing, real estate brokerage services, and title and underwriting services, made international headlines in December when he laid off 900 employees over a Zoom call. Better laid off another 3,000 employees in March after the departure of senior executives, including Christian Wallace, head of real estate brokerage subsidiary Better, Better Real Estate LLC.

mixture

Mortgage technology provider and title insurer Blend Labs Inc. announced in April that it would lay off 200 employees, or about 10 percent of its workforce, as rising mortgage rates curtailed refinancing. Before going public last year, Blend paid $422 million to acquire a national title insurance and settlement service provider, Title365, from Mr. Cooper Group. The deal helped Blend grow sales by 144 percent in 2021, but also contributed to a 129 percent increase in operating expenses.

compass

Compass founder and CEO Robert Reffkin announced in mid-June that his company would lay off 10 percent of its workforce, or about 450 employees. All layoffs were for full-time employees, not agents. In an email to Compass staff, Reffking explained that “the economic environment has steadily deteriorated in recent months”. He cited continued rises in inflation and mortgage rates, as well as a consensus among industry leaders that a recession may be imminent. In addition to laying off employees, Compass also decided to halt further expansion for the time being.

Doma

Digital property insurance, escrow and underwriting provider Doma announced in May it was laying off 310 employees — about 15 percent of its workforce — after rising mortgage rates cooled its customers’ mortgage lending. CEO Max Simkoff said Doma is reducing costs to further adapt the technology it has developed to provide “instant underwriting” of title insurance for mortgage refinances so that it can be used to underwrite title insurance for more complex purchase loans.

Guaranteed price

Guaranteed Rate – Known to many real estate agents for their joint ventures with franchise giant Realogy Holdings Corp. and national brokerage firms @properties and Compass — took a big step in early 2021, acquiring Stearns Holdings LLC “with the ultimate goal of becoming the nation’s number one lender.” In January, Guaranteed Rate scaled back its ambitions, laid off 348 employees and closed its third-party wholesale channel, Stearns Wholesale Lending.

homie

Utah-based flat-fee brokerage Homie laid off 119 employees, about a third of its workforce, in February and said the limited housing stock has “created a challenging real estate market for homebuyers.”

basement mortgage

Real estate franchise giant Keller Williams laid off 150 new employees from its Keller Mortgage division in October and handed out more pink slips in late May as part of a reorganization of the company’s operations and support groups. Even as it laid off workers, Keller Mortgage said it was committed to long-term growth and was advertising positions for loan officers who can work from anywhere in the US

Beat

A year after Goldman Sachs was hired to list the company at a proposed valuation of $2 billion, power buyer Knock announced layoffs in March that affected 115 employees, or about 46 percent of its workforce. After Knock pulled out of plans to go public and closed a smaller $220 million funding round with private investors, Knock said a downsizing would allow it to continue with its plans to expand into 90 markets by the end of the year.

credit depot

LoanDepot CFO Patrick Flanagan reported a loss of $91.3 million in March and warned that “layoffs” are part of plans to “aggressively” manage costs in a bid to return to profitability by the end of the year reach. “The first quarter results reflect an environment that could prove to be one of the most challenging our industry has ever faced,” said Anthony Hsieh, founder and executive chairman of LoanDepot, speaking to investment analysts.

Mr Cooper

Rising mortgage rates are making what has traditionally been Mr. Cooper’s core business — collecting mortgage payments from nearly 4 million borrowers — much more profitable. But they also limit the company’s ability to take on new mortgages, prompting the company to lay off 250 employees in the first quarter of 2022 and another 420 in the second quarter. At the end of 2021, Mr. Cooper had 8,200 employees, so the 670 announced layoffs to date means the company has shrunk by at least 8 percent since then.

Notarize

After almost single-handedly creating the category, online notarization startup Notarize laid off 110 employees on June 15, with CEO Pat Kinsel citing economic uncertainty and access to future investment capital.

pennymac

Pennymac, the nation’s second-largest mortgage lender, laid off 236 workers at six California locations in May because demand for home loans slumped. Pennymac employed 7,208 people worldwide at the end of last year.

redfin

The online search portal-turned-full-service real estate brand laid off 8 percent of its employees on June 14. CEO Glenn Kelman attributed the move to a 17 percent drop in demand in May. The layoff was expected to affect nearly 500 employees, including agents, engineers, recruiters, trainers and other support staff.

Redfin’s offer to expand its mortgage footprint by acquiring San Francisco-based Bay Equity Home Loans for $135 million also resulted in pink slips for 121 existing employees in sales support, capital markets and operations in Redfin’s existing mortgage business.

REX real estate

After two rounds of layoffs last year, discount retailer REX Real Estate closed two offices in Texas in May. Although reports indicated that REX Real Estate had fired all of its agents and was preparing to close, REX co-founder and COO Lynley Sides told Real Trends that the company is focused on brokering deals for institutional landlords in California and Florida have.

Rocket Companies Inc.

To avoid layoffs, the country’s largest mortgage lender, Rocket Companies Inc., made bids for around 2,000 workers in April. If the acquisitions are accepted, the acquisitions are expected to save Rocket about $180 million per year, executives said on a earnings call in May.

side

Real estate tech startup Side said it was growing faster than it could train, support and develop new employees, and on June 1 told about 10 percent of its employees were out of work. Side, which provides branding and technology for independent brokers and often acts as a broker of record for high-performing agent teams, said last summer it was on track to go public after achieving unicorn status and more than Raised $250 million in funding.

Tomo

Tomo, a mortgage fintech founded by former Zillow executives with a sole focus on home loans, reduced its workforce by nearly a third on May 31. CEO Greg Schwartz said Tomo is shelving plans to expand into additional markets for the time being.

Wells Fargo

Wells Fargo, whose mortgage production has slowed due to retail store closures, laid off an unspecified number of employees in its home construction division in April as “a result of cyclical changes in the broader home credit environment,” the company told Inman. Reporting first-quarter results, Wells Fargo executives said they plan to cut spending, with home finance revenue falling 33 percent year over year to $1.49 billion.

Zumper

Online search firm Zumper cut 15 percent of its staff in early June, proving the rental market is not immune to the economic turmoil rocking the industry. According to sources, all teams of the company with about 300 employees were affected. A Zumper spokeswoman justified the decision with “macroeconomic and market factors”.

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