Homeward, a company that helps buyers make all-cash offers on houses, has joined the ranks of Power Buyers conducting layoffs amid the ongoing market slowdown.
The Austin-based company notified employees today it was laying off 20 percent of its workforce amid the ongoing decline in demand for homes, a spokesperson told Inman in an email.
“Letting go of employees is not a decision we made lightly at Homeward,” the spokesperson wrote. “However, the shifting market and decrease in contract activity have resulted in more headcount than necessary — we have to adjust our business to accommodate the new reality we’re in.”
Homeward employed approximately 600 people prior to the announcement, according to the spokesperson. While the company declined to provide the exact number of workers affected, this would place the number of layoffs somewhere in the neighborhood of 120.
The layoffs at the Power Buyer were not specific to any region and affected workers across a broad array of departments, the company said.
And while the company argues these cost-reduction efforts were necessary now, it maintains its expectation that the company is poised for long-term growth as consumers look for alternative financing options.
In a letter to employees, founder and CEO Tim Heyl wrote that the company had delayed making layoffs even as several of its competitors — including Knock, Orchard and Ribbon — trimmed staff.
But in recent weeks it became clear that Homeward’s current staffing levels were out of line with the company’s revenue forecasts, he added.
“When we talked with you at the All-Hands [meeting] in June, we believed our cash runway was sufficient to bridge this period of lower activity,” Heyl told employees. “We reduced our non-people costs and planned our spend to hedge against further decline. However, the continuing acceleration and severity of the market shift has forced us to consider deeper changes to our business.”
The layoffs come despite the company’s original product, “buy before you sell,” drawing continued interest and maintaining prospects for growth, Heyl said.
But the drop in demand for homes has taken a toll on one of Homeward’s other main offerings, “buy with cash.” This has had a “sudden and sizable impact” on the company’s business, Heyl told employees.
Homeward’s layoffs weren’t the deepest of the Power Buyers this year but they weren’t the smallest either.
Nearly half of Knock’s workforce was laid off in March. Orchard let go of 10 percent of its workers in June. And Ribbon laid off about one-third of its employees in late July.
Heyl said the laid-off employees will receive severance pay based on the time they’ve spent at the company. He also said Homeward will waive most of the noncompete clauses of affected employees, freeing them to work for other companies in the industry.
