Real estate company Redfin laid off 8% of its employees and predicted years of lethargic home buying Tuesday.
Redfin CEO Glenn Kelman announced the firings in a public post to the company's website on Tuesday, saying real estate demand in May fell nearly 20% short of expectations.
"To all the departing people who put your faith in Redfin, I’m sorry we can’t keep our commitment to you," Kelman wrote. "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."
"Mortgage rates increased faster than at any point in history," he added. "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."
Employees are being offered a base 10 weeks of severance pay and one additional week for each 12-month period served with the company, to a maximum of 15 weeks.
The layoff comes amid a series of warning signs that the housing market is slowing down after surging in recent years.
Sales of existing homes fell for the third month in a row in April, reaching the lowest point since June 2020.