Opendoor, which has raised more than $1 billion in funding in the last few years, laid off over 600 of its employees Wednesday as the company struggles to deal with the economic impact of the coronavirus.
This comes after a wave of iBuyers have either paused iBuying, started cancelling contracts, or made sizable amounts of layoffs.
“COVID -19 has had an unforeseen impact on public health, the U.S. economy, and housing,” Eric Wu, chief executive officer of Opendoor, said in a statement.
“Given the shelter-in-place guidelines, we’ve seen declines in the number of people buying, selling, and moving during this time of uncertainty. In response, we’ve announced to the company that we’ve made the difficult decision to reduce our team by 35%,” Wu continued. “This was necessary to ensure that we can continue to deliver on our mission and build the experience consumers deserve.”
For those who were laid off, Wu said that they will receive eight weeks of pay and reimbursement of 16 weeks of health insurance coverage.
Wu also said he would be donating his 2020 salary to the Opendoor Employee Relief Fund to those who are struggling financially or health-wise due to coronavirus. Other executives will also be contributing to the fund.
“Though this was difficult news to deliver, our focus here at Opendoor remains the same. We continue to work passionately to simplify the customer experience, transform the entire category, and empower millions of homeowners with the freedom to move.”
The layoffs are the latest in a series of moves by Opendoor to deal with the downturn in the housing market.
The company recently paused its homebuying efforts and began canceling pending contracts, leaving some home sellers stranded with two mortgages.
And now, the company has laid off 35% of its staff.
It’s a swift fall for a company that was once thought of as one of the companies that could become the “Amazon of housing,” a true one-stop-shop for all things housing.
Opendoor launched as a direct buyer in 2014, starting out initially in Dallas-Fort Worth and Phoenix before expanding to Las Vegas, Atlanta and other cities.
Eventually, the company expanded into mortgages and title, and was also connecting home sellers directly with homebuilders to facilitate an all-in-one home selling and newly built home-buying process, which it calls a “trade in.”
All the while, the company was raising money hand over fist.
Just over a year ago, Opendoor raised $300 million in a capital raise that valued the company at $3.8 billion.
The funding came a few months after the company secured a $400 million investment from SoftBank Vision Fund, SoftBank’s investment arm.
A few months earlier, Opendoor raised $325 million in its Series E funding round. That came just 18 months after the company raised $210 million in its Series D round of funding.
All in all, the company raised $1.3 billion in total equity capital.
But despite having raised well north of $1 billion, Opendoor is now cutting more than one-third of its staff.