Homeward doesn’t seem like a home for the 20 percent of its workers laid off by the power buyer.
The Austin-based company has cut a fifth of its workforce in response to the housing slowdown, Inman reported. The company employed about 600 people before the cuts, which means around 120 have been laid off.
A company spokesperson said in a statement: “Market fluctuations and reduced contracting activity have resulted in higher numbers than necessary – we need to adjust our business to accommodate the new reality we’re in.”
The move comes two months after Homeward founder Tim Heil told staff he hoped the company would not follow in the footsteps of rivals Knock and Orchard, which have made cuts of their own in recent months. But Power this week walked back the assertion, telling employees that “the pace and severity of continued market change has forced us to consider profound changes to our business.”
Injured employees receive severance pay based on their time with the company. Most affected employees will have their non-compete clauses waived.
Home buying startups’ main offerings include the “Buy Before You Sell” program and the “Buy for Cash” program, which lend money to buyers to provide home financing and promise to buy their old home if they can’t sell it. The company It had one of the most prominent protech funding rounds in 2020, raising $105 million.
But buyers have begun to retreat from the housing market due to low inventory, high prices, high mortgage rates and general economic uncertainty. Fewer buyers mean fewer people looking to take advantage of home buying programs.
Despite the layoffs, Homeward says it is poised for long-term growth.
The starting strike rate is at the center of significant cuts by energy buyers in recent months. In March, home-buying startup Nook scrapped plans for an IPO, laying off 46 percent of its workforce. Ribbon recently laid off about a third of its workforce, while Orchard cut 10 percent of its workforce.
– Holden Walter-Warner