“Buy before you sell” firm Homeward has laid off roughly 20% of its workforce, according to a letter from CEO Tim Heyl to employees sent on Wednesday.
Despite recording what Heyl calls the firm’s “strongest month ever” in May and solid second quarter results, Heyl said the market shift was more sudden than anticipated, forcing the firm to make cuts.
“Meeting the moment sometimes requires a business to evolve,” Heyl wrote. “Despite having a strong financial start to the year, we are currently staffed for more growth than we’re now forecasting. This reduction today is necessary for our future success, but that doesn’t make it easier to part with so many of our colleagues.”
Before reaching the point of layoffs, Heyl said the company reduced its “non-people costs and planned [its] spend to hedge against further decline.” However, Heyl wrote that it eventually became clear that the market headwinds of inflation, continued home price growth and rising mortgage rates, were a bigger threat than anticipated, cutting into revenue the firm had hoped to generate from its “buy with cash” product.
“We don’t know how long real estate will continue to soften, so we must plan for a less active market,” he wrote.
Homeward said it is offering laid off employees tenure-based severance pay and two months of COBRA health insurance benefits. In addition, the firm is offering impacted employees access to outplacement services through the company’s recruiting team and removing non-compete clauses for impacted employees.
“Our mission to improve the homebuying experience still remains the same,” a spokesperson for the firm wrote in a statement. “We remain committed to Homeward’s promise to deliver a better experience for agents and homebuyers by making real estate more accessible and streamlined.”