Real estate industry

Layoffs hit real estate sector due to falling demand

Layoffs have swept through the tech industry, and now the real estate world also give in.

In filings with the U.S. Securities and Exchange Commission, real estate firms Redfin and Compass revealed they would lay off 8% and 10% of their staff, respectively.

Both companies saw their shares fall, with Redfin hitting a 52-week low.

Affordability has become intangible for many today, with demand for mortgages hitting their lowest level in more than two decades. According to Mortgage News, rates rose to 6.28% from 3.29% in January.

“Due to the clear signals of slowing economic growth, we have taken a number of steps to protect our business and reduce costs, including suspending expansion efforts and making the difficult decision to downsize our team. of employees by about 10%,” said a spokesperson for compass.

According to Redfin CEO Glenn Kelman, demand was 17% lower than expected, limiting the amount of work for the company’s agents and support staff.

“We could be facing years, not months, of fewer home sales, and Redfin still expects to thrive. If falling from $97 a share to $8 isn’t straining a company, I don’t know what is,” Kelman said.

The threat of recession has prompted many companies to make this shift.

The surge in demand seen at the start of the year drove companies to hire, but as inflation left consumers clinging to their wallets, companies were forced to come to terms with the fact that they may have overhired.

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