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Power Buyer Orchard is the latest real estate company to downsize, laying off just under 100 employees across a mix of departments Thursday.
The layoffs affected about 10 percent of Orchard’s workforce and were driven by “mounting economic uncertainty” and the need for Orchard to “get to profitability as soon as possible, so that we control our own destiny,” CEO Court Cunningham said in an internal note to employees.
“To get [to profitability], we are adjusting both our growth rate and cost base,” Cunningham wrote. “Our executive team and board explored all options to reduce expenses and committed to a number of initiatives which we will discuss tomorrow, but ultimately determined that a reduction in the size of our team was also necessary. The changes we make today will ensure that we have enough runway to continue to create raving fans in what will be a challenging economic climate over the next 18 months.”
Founded in 2017 as Perch, New York City-based Orchard is a vertically integrated Power Buyer, providing real estate brokerage, mortgage and title services. After raising $69 million in a Series C financing round in 2020 and setting an ambitious goal to be real estate’s Amazon, Orchard beefed up its executive team last summer to help the company scale nationwide.
Originally focused on helping existing homeowners buy their next home before selling, last month Orchard expanded its offerings to help first-time homebuyers make cash-backed offers using its Buy with Orchard product. After expanding into Phoenix, Portland and Seattle in April, Orchard has a presence in 13 markets, and plans to offer Buy With Orchard in all of them in coming months.
Even as it lays off workers, Orchard continues to advertise approximately 50 openings in its mortgage, real estate brokerage, marketing and finance departments. Orchard’s director of communications, Mandy Menaker, confirmed to Inman that Orchard still intends to fill those roles.
Menaker, who provided a copy of Cunningham’s note to Inman, said the company had “put a lot of thought into how we communicate this information with team members and how we can ensure that impacted team members are treated with compassion.” The note went out after employees attended a live town hall meeting to break the news.
Orchard is just one of a number of mortgage and real estate companies to downsize in recent weeks, as the Federal Reserve’s efforts to combat inflation by raising interest rates raise worries about a decline in home sales and a potential recession.
In addition to cash severance payments, all affected employees will have their health insurance covered for three months.
“Starting next week, our recruiting team will host optional office hours to help with resume optimization and job search strategy,” Cunningham’s note said. “Additionally, we will circulate an opt-in list of impacted employees who are open to new job opportunities. Our exec team will be sharing this list with our networks and our investors’ networks, and encouraging teammates to do the same.”
Matthew Josefs, who left Zillow last year to help Orchard cultivate new partnerships, expressed no regrets about his time at Orchard in sharing news that he’d been laid off on LinkedIn.
“After getting the initial reactions and emotions out of the way, the realist in me understands the why and I truly couldn’t be more confident in the future for both Orchard and myself,” Josefs posted on LinkedIn.
Josefs encouraged “any lenders deciding whether or not to partner with Orchard, do it — it’s the best solution out there for your clients. Just sign before EOM so I can get paid that commission, please!”
But another former Orchard employee who contacted Inman was more critical of how the layoffs were handled, saying “it was not done with any compassion. There was zero warning and layoffs were effective immediately. We literally woke up with no job.”
Announcing the news at a company-wide town hall created a panic that could have been avoided by having small group discussions, the former employee said.
The former Orchard employee — who asked not to be named because they feared losing the one month of severance pay they were provided — said that until recently, “we were still hiring for my position, and a new person just started like two weeks ago.”
While Orchard continues to advertise openings for other roles within the company, the laid off employee said they were not asked if they would be interested in applying for them.
“That did infuriate me,” the former employee said. “I, and other people on my team [who were laid off], have a multitude of skills and career paths. I have a vast resume, and would have been interested in other positions.”
In his internal note to employees, Cunningham said, “It’s important that you know I personally reviewed the individuals impacted and that it was my final decision on roles we eliminated. If today is your last day, there is only one person responsible, and that’s me. I am sorry to have led us to this spot.”
The laid off employee characterized that statement as “grandstanding.”
“How is that possible if you did not know me, and we were hiring until two weeks ago?” the former employee said. “To wake up with no job is not OK in this economy.”
While Cunningham predicted in his note to employees that he expects “a challenging economic climate over the next 18 months,” the former employee said that with one month of severance pay, “I don’t have time to wait. I have to find another job immediately.”
Editor’s note: This story has been updated to include comments from a former Orchard employee who was critical of how the layoffs were handled, and to correct that Orchard is currently advertising approximately 50 job openings, not more than 200 as originally reported. The company says it will often list the same role across all 13 of Orchard’s markets if the location is flexible, so one job opening may be listed multiple times. Inman has created resources for newly jobless real estate pros, including a Talent Pass providing free access to the upcoming Inman Connect Las Vegas.
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