Redfin and Compass lay off hundreds as housing market cools, inflation soars.
Two real estate firms lay off hundreds of workers Tuesday due to slowing sales and increased interest rates.
Redfin and Compass both announced 900 layoffs. Redfin CEO Glenn Kelman said his company is laying off 470 wo
rkers, or 6% of its workforce, after May demand was 17% below projections.
"We raised hundreds of millions so we wouldn't have to lay off workers after a few months," Kelman added.
"Mortgage rates have never been higher. Redfin plans to prosper despite years of fewer house sales. Fallin
g from $97 per share to $8 must have been hell for the corporation."
Compass acknowledged to USA TODAY that it is laying off 450 individuals, or 10% of its workforce.
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High mortgage rates and 6% inflation are cooling the once-hot property market. Redfin fell over 5% and Compass more than 10% on Tuesday.
Redfin is paying laid-off employees 10 weeks of base income and an additional week for every 12 months of service, up to 15 weeks.
Seattle-based business also provides three months of healthcare coverage for former employees, Kelman said.
Kelman said Redfin is offering laid-off employees 10 weeks of base salary and an additional week for every 12 months of service, maximum at 15 weeks of pay.
The Seattle-based firm is also providing three months of healthca
re coverage for its former staff, Kelman said.
"Today's layoff is the result of shortages in Redfin's revenues,
not in the personnel being let go," Kelman added.
"Today's layoff is due to revenue deficits, not the people being let go," Kelman said. "But our culture has been s
hifting toward performance and profits."