Opendoor chief executive and co-founder Eric Wu announced the layoffs in a Wednesday blog post, noting that about 550 employees would be affected. The company had already scaled back over 830 positions earlier this year, primarily through a reduction in third-party resourcing, and eliminated “millions of fixed expenses,” according to Wu.
“The reality is, we’re navigating one of the most challenging real estate markets in 40 years and need to adjust our business,” the CEO said in the company blog post.
Federal reserve hikes interest rates:Will inflation now slow down?
The San Francisco-based tech company has been viewed as a changing force in the U.S. residential real estate market, paving the way forward for a new type of house hunters called iBuyers, or instant buyers.
The company uses an algorithm to price homes, offers to purchase the properties with cash, makes necessary repairs and then resells the homes.
But rising interest rates have cooled the once red-hot housing market. The current mortgage rates have eclipsed 7% for the first time in more than two decades, curbing demand. Pending home sales plunged for the fourth straight month in September, down 10.2% from the previous month.
The Federal Reserve on Wednesday raised its key short-term rate by three-quarters of a percentage point to a range of 3.75% to 4%, a move that is expected to continue driving up rates for credit cards, home equity lines of credit and other loans.
Zillow, another online real estate company, has also laid off workers. The company confirmed that it laid off about 300 employees last month.
Opendoor stock price
Opendoor’s stock price fell 6.15% Wednesday, closing at $2.29.
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