Are there Redfin layoffs? At the start of the year, the layoff bug is hammering many companies. It impacted the major tech industries along with the real estate industry. One of the real estate firms, Redfin, has been announcing layoffs since last year.
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Is Redfin Laying Off Employees?
Is Redfin Laying Off Employees? As the US housing market is going down from its previous white-hot activity in 2023. Due to this, the Seattle-based company Redfin announced layoffs.
A 30-year fixed-rate mortgage’s average interest rate increased by 7.14 per cent in 2022. It is estimated that it is the highest level since 2001. Due to higher interest rates, pending home sales dwindled to 35 per cent last year. Reportedly, the sales of homes dropped before October 2022. Some sellers have lowered their asking price rates as the number of buyers has decreased.
Last year economists predicted that mortgage rates would skyrocket in 2023. Because, at that time, it was battling with soaring inflation. The expectations are now proven to be true.
The company said, “Redfin announced job cuts. The company expects that a housing downturn lasts at least through this year.”
The key factor in declining home sales is continuous lagging supply. A data journalist said, “Homeowners do not want to sell homes as they don’t want to give up their low mortgage rate. On the other hand, some said it is not so easy to buy another home. So that, many Americans moved recently.”
Other factors are responsible for keeping many would-be buyers sidelined. Or even sellers also. These are as follows:
- High-interest rates
- Stubborn inflation
- Crisis in confidence in the banking system
Redfin Layoffs 2022
Redfin announced 862 job cuts at the beginning of 2022. It also laid off a lot of employees further in the same year.
In an email, the real estate data company Redfin said. “It laid off around 13 per cent of its total workforce. Moreover, nearly 264 workers were laid off at RedfinNow. RedfinNow was launched a few years ago.”
Further, In June 2022, Redfin laid off 470 workers due to a slowdown in its housing market.
The company said, “We have decided to lay off employees to focus on our resources. As these resources are facing a rise in the cost of capital.”
Redfin Layoffs 2023
Redfin Layoffs – April 2023
In April, the US-based companies laid off around 66,995 workers. In tech industries, employees lost their jobs due to AI. According to reports, the US-based employers have announced plans to lay off, of which around 417,000 employees were impacted in 2023. While they announced plans to lay off 100,694 employees till the same month last year. It clearly shows that layoffs increased by 315 per cent this year from last year.
Besides layoffs, companies also freeze the hiring process in April. Due to the economic slowdown, companies put brakes on hiring at that time. So, the job openings flattened, and consumer confidence went down.
Redfin Layoff – May 2023
Layoffs are happening particularly in US-based companies. The US-based Redfin announced multiple rounds of layoffs this year. Moreover, a lot of companies conducted mass layoffs in May. The layoff beat last year’s record for the same period.
Suppose we compare 2022 and 2023’s records. Then the US-based employers announced massive job cuts. In 2023, companies laid off around 80,089 workers in May. While in the same month last year, the number of job cuts was 20,712. It represents a 287 per cent rise in job cuts this year.
Companies Planned To Resume Hiring In May
On the contrary, multiple companies announced their plans to resume hiring in May 2023. Employers said they hired around 7,884 workers in the same month.
It reported that companies hired 101,833 workers till May this year. At the same time, they hired around 612,686 workers in the same month last year. Comparatively, companies hired 83 per cent fewer employees this year than last year.
When Redfin predicted that the housing market was continuously going down. Then it blamed the real estate market conditions for the latest layoffs.
This year, the company conducted three rounds of layoffs. It trimmed 201 employees, i.e. about 4 per cent of its workforce. The layoffs come this year because the housing market is not recovering. Deputy Chief Economist Taylor Marr said, “We are still broken down. However, would-be homebuyers are coming off the sidelines.” He also experiences a slight growth in the home-buying process.
In November last year, Tour scheduling reported a 40 per cent decline. While in January and February, it again declined to 20 per cent.”
The company’s predictions last year said, “The market this year would collapse 30 per cent compared to the market in 2021. That prediction was accurate. Now, it is believed that sales will remain the same till 2024.
Due to various reasons, rates are still higher than in the past few years, as the 30-year fixed mortgage rates declined to 6.3 per cent in the same period by the end of April. It reached the lowest level in just two months.
The company’s revenue dropped to 25 per cent in the fourth quarter. It lost 61.9 million US dollars this year. At the same time, a net loss in the same period last year was 27 million US dollars.
Reports say that between January 2023 to January 2024, home prices remain increased by 0.5 per cent. On the other hand, another economist predicted that home prices might decline to 4.2 per cent by the end of 2023.
Which Sector Affected The Most?
The most affected sector around the world is the technology sector. However, other sectors are also affected, but lesser than the Tech sector, as the Tech sector had already laid off around 136,831 employees by May 2023. The number of laid-off employees increased by 2,939 per cent this year than last year.
In May, US-based tech companies announced to lay off nearly 22,887 employees this year. Since 2001, the Tech sector has been laying off hundreds or thousands of employees yearly. Records say It is the sector that announced the most job cuts. When layoffs started in 2001 in the tech sector, around 168,395 job cuts were announced.
When it comes to retailers, then they announced 45,168 job cuts this year so far. While in May, Retailers cut nearly 9,053 jobs.
Comparatively, Last year through May, Retailers cut 4,335 jobs. This year retail cut increased by 942 per cent.
In 2023, The Automotive Sector laid off around 18,017 employees this year. While in 2022, this sector laid off 5,380 workers. This year, the automotive sector increased the number of layoff employees by 235 per cent.
The banking sector was also affected the most, as many financial firms announced layoffs this year. As of May 2023, it reported, financial firms cut around 36,937 jobs. At the same time, they cut 8,788 jobs last year in the same period. Comparatively, job cuts jumped by 320 per cent this year.
Health Care Sector
This year, 33,085 job cuts have been announced by Health care organizations. It includes health products manufacturers and hospitals. Last year, in the first five months, healthcare cut around 18,301 jobs. This year, the sector announced 81 per cent more job cuts than in 2022.
In 2023, The Media Industry announced 17,436 job cuts till May. News Media also announced layoffs. It includes digital, print, and broadcast, making 1,972 job cuts. While in 2022, News Media announced 1,808 job cuts.
Companies Like Redfin Announced Layoffs In 2023
Various changes in the housing market have not only impacted the real estate Redfin company. Besides, other mortgage lenders such as:
Realtor.com, LoanDepot, Better, and a few more companies have also announced layoffs in the past few months.
- According to HousingWire, LoanDepot laid off around 4,800 workers in July.
- Better has conducted four rounds of layoffs so far this year.
- Zillow is similar to Redfin or the biggest enemy also. It also trimmed hundreds of job roles this year. It noted that the firm laid off around 300 employees between June and July. It indicates that Zillow laid off 5 per cent of its workforce.
It is revealed that the rival company Zillow announced plans in 2022. It would lay off a quarter of its workforce just after Home flipping unit lost over 420 million US dollars. The company is still hiring employees for tech-based jobs. According to the company, Layoffs allow it to expand its housing super-app.
The firm conducted two rounds of layoffs in 2022. In June, a Real estate data firm laid off around 450 workers. Moreover, a significant portion of the company’s product and engineering team were also affected in September. But no information is available on how many workers were impacted then.
The Bottom Line
Redfin laid off around 8 per cent of its workforce last June. Later, in the same year, in November, RedfinNow laid off 862 workers, i.e. 13 per cent of its total workforce. The layoff has happened due to a sharp decline in the housing market.
Housing Market conditions are different in various geographies. Some local markets are even weaker than national numbers. At the same time, some left those areas that were staffed fully.
As mortgage rates have increased, many would-be homebuyers left hope to buy a home. According to reports, mortgage rates increased significantly this year than last year. Many homebuyers sit on the sideline as the combination of higher home prices with mortgage rates increases to their peak.