Redfin is set to shutter its home-flipping business and reduce its workforce by 13%, laying off 862 employees.
About 264 of the job cuts will be directly related to the shutdown of RedfinNow, the company’s instant buying, or iBuying, business in which it purchases a home as-is, completes minor improvements and resells the home on the open market.
“Winding down RedfinNow is a strategic decision we made in order to focus our resources on our core businesses in the face of the rising cost of capital,” the company wrote in a filing with the Securities and Exchange Commission.
Redfin and other iBuyers like Zillow, which closed its home-flipping arm a year ago, have said the capital-intensive business has become unsustainable because they were buying homes at higher prices than they could sell them for in the future.
Redfin’s remaining workforce cuts are primarily among real estate services staffers and employees at the company’s headquarters. The cuts will reduce the company’s number of lead agents by 9%, or approximately 197. In addition, Redfin said, approximately 218 employees will have their current role eliminated, but are being offered a new role within the company.
While real estate companies couldn’t seem to expand fast enough during the go-go years of ultra-low mortgage rates and skyrocketing home prices during the pandemic, many are shedding jobs now as the housing market cools and the economic picture becomes more uncertain.
In June, Redfin laid off 8% of its workforce due to the slowing housing market. Through layoffs and attrition, the company said it has now reduced its total number of employees by 27% since April.
“A layoff is awful but we can’t avoid it. 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 20 …