'I'll Spend The Rest of My Life Wondering How I Could've Avoided These Layoffs': Real Estate Firms Attempt Damage Control As the housing market slows, Redfin and Compass have decided to trim their workforces, making cuts of 8% and 10%, respectively.

By Madeline Garfinkle

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

The housing market appears to be slowing after a pandemic-induced frenzy, and real estate firms are pivoting in anticipation of a possible downturn.

As mortgage interest rates rise and home sales drop, Redfin and Compass are cutting their workforces. According to filings with the Securities and Exchange Commission, Compass will be cutting its workforce by 10%. Redfin, meanwhile, will be trimming its staff by 8%, which amounts to more than 400 employees from each company.

Compass stock is trading at about 75% less than its price in 2021. Redfin's stock is down almost 92% since 2021.

Related: Redfin vs. Zillow: Which Online Real Estate Marketplace Stock is a Better Buy?

In a company-wide email, Redfin CEO Glenn Kelman shared his remorse about the decision. "I Said We Wouldn't Lay People Off Unless We Had To. We Have To," he wrote.

Kelman emphasized that while they tried to avoid layoffs, rising interest rates position the market for "years, not months, of fewer home sales," and that "if falling from $97 per share to $8 doesn't put a company through heck, I don't know what does."

Redfin's layoffs target primarily user research and engineering positions. In his closing remarks, Kelman stated: "I'll spend the rest of my life wondering how I could've avoided these layoffs. What's most important now is treating the people leaving with humanity and respect."

Compass, so far, has been less forthcoming about its layoffs. In their filing, the company says these actions are necessary to "improve the alignment between the company's organizational structure and its long-term business strategy."

Compass is also looking to cut costs by consolidating some offices.

Related: Never Let a Downturn Crush You

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Related Topics

Starting a Business

This Retiree's Leisurely Side Hustle Makes $66,000 a Year and, 'You Don't Even Need to Go to High School to Do It'

Barbara Hill wanted a flexible, part-time job that would transition well into retirement. Now she mentors younger people who are making over $200,000 a year. Here's her insider's guide to getting started.

Marketing

The Miley Cyrus Approach To Marketing — Why It's a Radically Different Method For Achieving Brand Impact

In case you missed it, Miley Cyrus recently won her first Grammy. In her acceptance speech, she told a story that is a great learning lesson for business owners and marketers alike, especially those who find themselves burned out and exhausted in this current environment.

Business News

HP Wants You to 'Never Own A Printer Again,' Launches Rental Subscription

In February, HP's CEO Enrique Lores stated that making printing a subscription service was the company's "long-term objective."

Business News

IKEA Price Increases Are Going Viral — Here's How Much Your Favorite Couch Costs Now: 'Inflation Is Crazy'

A video with a customer complaining about "inflation" and "corporate greed" has racked up over 1.3 million views on TikTok.