Redfin announced it would be reducing its number of employees by approximately 7%, according to the company’s filing with the Securities and Exchange Commission Tuesday morning.
“Due to the impact of COVID-19 on our business, on April 5, 2020, we decided to reduce our number of employees by approximately seven percent,” the filing said. “We expect to complete this workforce reduction by the end of April 2020.”
According to a blog post from Redfin Chief Executive Officer Glenn Kelman, 41% of its agents, along with the coordinators, recruiters, renovators and others that support those agents, will go on furlough until September 1. The furlough includes a transition bonus and health-care benefits throughout the summer months.
Meanwhile, those who build technology and other programs will stay with the company, with a temporary salary cut of 10% to 15% and no bonuses.
“We still have had to furlough people today because of a downturn, but it wasn’t because we didn’t try to trade growth for job security,” the blog said. “Every year, we’ve hired about 25% fewer agents than could be supported by the demand from Redfin.com, so that even if demand fell 25%, our workforce would still be at 100% productivity. Now housing demand is down much more than that.”
“We’re relieved that the people who have to leave Redfin will also get more support,” the post continued. “We decided on this large-scale furlough because fewer people are buying and selling homes, but another factor was the federal government’s $600 weekly contribution to each person’s unemployment insurance.”
The blog post continues to say that now there is so much virtuality in the home search, that it will be beneficial for the future in home sales.
“When this pandemic ends, the world will mostly go back to the way it was, but more homebuyers will preview homes online, not just through photos but now via videos and three-dimensional scans,” the blog post said. “Some may find themselves a few hours from making an offer before meeting an agent. That agent will often be a Redfin agent, available on-demand, in-person or online. The listings that will shine the brightest in this virtual-shopping world will be the homes listed by Redfin agents.”