Breaking News

Shares of Redfin are down 34c, or 4% to $8.21 following the company's announcement of plans to lay off approximately 6% of its total employees.

Redfin CEO Glenn Kelman said in a letter to staff that was published on the company's website that the company is asking 8% of its workforce to leave, or about 6% if you include the people of RentPath and Bay Equity. "To all the departing people who put your faith in Redfin, I'm sorry we can't keep our commitment to you," Kelman said. "With May demand 17% below expectations, we don't have enough work for our agents and support staff, and fewer sales leaves us with less money for headquarters projects. We're offering laid-off colleagues ten weeks of base salary, with an additional week of pay for every 12 months of service beyond one year, capped at 15 weeks of pay. For agent and support roles, severance pay includes the estimated value of productivity bonuses or sales bonuses. We'll also pay departing employees the cost of extending our healthcare coverage for three months. This should give you until the end of the summer to find work. A layoff is always an awful shock, especially when I've said that we'd go through heck to avoid one, and that we raised hundreds of millions of dollars so we wouldn't have to shed people after just a few months of uncertainty. But mortgage rates increased faster than at any point in history. We could be facing years, not months, of fewer home sales, and Redfin still plans to thrive. If falling from $97 per share to $8 doesn't put a company through heck, I don't know what does." Kelman added that the layoffs are the result of revenue shortfalls and "not in the people being let go." "Because for every project we start, we have to think about another we'll stop," the CEO said. "We've already built tools for teams to work together on a transaction, so we need fewer engineers to add to those tools. We'll spend less on analytics and user research. When we were turning away tens of thousands of customers in 2020 and 2021, we had to hire a thousand employees a month to catch up, requiring berserk levels of recruiting, training and licensing. There's no avoiding that those groups will be hardest hit today." Reference Link

In a regulatory filing, Redfin stated: "Due to market conditions, on June 12, we decided to reduce our number of employees by approximately 470 employees, which represents approximately six percent of our total employees. We expect to complete this workforce reduction by the end of June 2022. As a result of this workforce reduction, we expect to incur a pre-tax cash charge for one-time termination benefits, which consist of severance and related costs, between approximately $9.5M and $10.5M in the second quarter of 2022."