It is incredible what one-year, a pandemic, and an economic meltdown can do to a business. Here is a headline from Techcrunch March 2019: Opendoor raises $300M on a $3.8B valuation for its home marketplace. This week, the company announced it was cutting 35% of its staff (approximately 600 of its 1800 employees).
Here is a letter from Eric Wu:
“COVID-19 has had an unforeseen impact on public health, the US economy, and housing. 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%. This was necessary to ensure that we can continue to deliver on our mission and build the experience consumers deserve.”
“We are doing everything we can to support our teammates who will be leaving us, including 8 weeks of pay and reimbursement of 16 weeks of health insurance coverage. Also, I’ll be donating my 2020 salary to our Opendoor Employee Relief Fund to help those who may be in more challenging financial or health circumstances due to COVID-19. A number of our executives will also be contributing to the fund to help our impacted teammates."
“I want to thank all of our teammates who’ve shown up every day for our mission, to help our customers, and to change an industry. They’ve helped 75,000 families, couples and individuals move and made our customers’ lives a lot less stressful because of their hard work."
“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.”
These are challenging times but many companies are in survival mode and it’s understandable why this needed to happen.
Estated reviewed OpenDoor’s portfolio last month (March 2020) and estimated it’s sitting on 4700 properties worth approximately ~$1.2B. A portfolio of this size comes with significant monthly costs causing the company to make drastic changes.
iBuying could have great advantages when the economy and real estate markets start to pick up again so we will keep you in the loop on what we see.