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In the face of mounting legal challenges and a federal investigation into one of the core aspects of its business, rental data firm RealPage laid off 4 percent of its workforce this week, according to reports.
The layoffs include employees at various levels within the organization, according to Bisnow and posts on social media, and come as RealPage faces proposed class-action lawsuits and scrutiny from federal regulators, who claim the company’s software allows property owners to collude on pricing. The company helps many of the country’s largest landlords set optimal rental rates, which regulators have said amounts to price-fixing.
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“RealPage is hyper focused on innovation and accelerating its business growth in 2024 and beyond, and as a result has made the decision to eliminate a small number of roles within the company,” Jennifer Bowcock, senior vice president of communications and creative at RealPage, said in a statement.
“We didn’t make these decisions lightly, and we are committed to supporting our employees during this transition inside and outside of RealPage,” Bowcock added.
A group of renters filed a legal challenge in October 2022 alleging RealPage was at the center of an illegal “cartel” that drove up rent at unprecedented rates starting in 2016. Brian Schwalb, attorney general of Washington D.C., sued the company in November, and Arizona Attorney General Kris Mayes filed suit in February.
Those lawsuits followed an exposé in the news outlet ProPublica, which gave readers an in-depth look at how RealPage helped landlords achieve the highest rent the market would allow.
Property managers for buildings owned by America’s largest landlords used the rent prices RealPage’s software recommended about 90 percent of the time, according to one of the lawsuits. The practices amounted to a monopoly, the renters’ suit alleged.
RealPage has denied wrongdoing and defended its software. It has said landlords are welcome to accept or ignore the advice of its rent-setting algorithm, and that many often do. It said its software recommends rent changes in all directions, and not just up, resulting in what it says are market-driven rental prices.
In a statement shared with Inman, Bowcock denied that the layoffs were related to the ongoing litigation.
“I’ve seen some media reporting on our actions this week as connected to the antitrust matters,” Bowcock said. “I can say there is no connection with this action and the company’s antitrust lawsuit.”
Still, federal regulators are keeping an eye on the company. The U.S. Department of Justice has opened a criminal investigation into the company, Politico reported in March.
Assistant Attorney General Jonathan Kanter has recently suggested to The New York Times that RealPage was “a concern.”
“I often say that if your dog bites somebody, you’re responsible for your dog biting somebody,” Kanter told The Times. “If your A.I. fixes prices, you’re just as responsible.”
