Redfin to cut another 13% of workforce, shutter RedfinNow

Nov 8, 2022, 6:07 PM | Updated: Nov 9, 2022, 8:51 am
FILE - A Redfin "for sale" sign stands in front of a house on Oct. 28, 2020, in Seattle. The online...

FILE - A Redfin "for sale" sign stands in front of a house on Oct. 28, 2020, in Seattle. The online real estate broker is cutting 862 employees and shutting down its instant-cash-offer subsidiary RedfinNow, another casualty of two-decade high interest rates stoked by the Federal Reserve's fight against inflation. (AP Photo/Elaine Thompson, File)

(AP Photo/Elaine Thompson, File)

WASHINGTON (AP) — Online real estate broker Redfin is cutting 862 employees and shutting down its instant-cash-offer subsidiary RedfinNow, another casualty of two-decade high interest rates stoked by the Federal Reserve’s fight against inflation.

The job cuts amount to 13% of Redfin’s workforce, the company announced in a regulatory filing. Redfin also laid off 470 employees in June, blaming slowing home sales.

Redfin has slashed more than a quarter of its workforce since April 2022 on the assumption that the housing downturn will last “at least through 2023,” it said in the filing.

The average U.S. long-term mortgage rate is hovering around 7%, partially a result of the Fed raising rates six times this year at it tries to stem four-decade high inflation. Fed officials have boosted their benchmark lending rate by three-quarters of a point at its last four meetings, sowing fears that its heavy-handed policy could tip the U.S. into a recession.

More rate hikes are expected into next year, though inflation data coming from the government Thursday could play into the Fed’s strategy.

Though the government recently estimated that the broader U.S. economy returned to growth last quarter, the Fed’s actions have chilled a once red-hot housing market.

Home sales have slowed for eight straight months as would-be first-time homebuyers pull out of the market, with borrowing costs greatly diminishing their options and inflation already taking a bite out of their incomes. Homeowners looking to upgrade are also waiting out the interest rate crest, not wanting to jump into a higher rate on their next mortgage.

In its filing, Redfin said it expected to incur charges of up to $23 million for the layoffs and wind down, most of those related to benefits and severance compensation related to the layoffs.

Redfin is writing down $18 million worth of inventory associated with RedfinNow, a result of homes losing their value since being purchased earlier this year. Redfin said it will continue to purchase homes under contract and renovate them and sell them quickly.

The Seattle company hopes to reduce its RedfinNow inventory to about $85 million worth of homes by the end of January 2023. It currently has about $265 million worth of homes through RedfinNow, with another $92 million under contract.

RedfinNow made sellers quick cash offers for their homes without having to list them.

Shares of Redfin tumbled more than 8% in morning trading. They have lost about 90% of their value this year and traded close to $100 each less than two years ago.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Police officers stand guard as other officers in yellow vests walk back at the cordoned off area ne...
Associated Press

Spain: 2 new letter bombs detected after Ukraine blast

MADRID (AP) — Spanish police are investigating a suspect letter bomb sent to an air base outside Madrid early Thursday, a day after a letter bomb exploded at the Ukrainian Embassy injuring an employee, the interior and defense ministries said. Government officials said another explosive package was detected Wednesday evening at an arms factory in […]
1 day ago
Associated Press

Swedish police make large drug seizure in Stockholm area

STOCKHOLM (AP) — Swedish police said Thursday that they have seized around 500 kilograms (1,102 pounds) of narcotics in Stockholm, with a total street value of about 80 million kronor ($7.6 million). Three men have been arrested on suspicion of serious drug offences in connection with Saturday’s raid in Tyreso, south of the Swedish capital. […]
1 day ago
A child wearing a face mask and riding on a scooter passes by a worker in protective suit on his wa...
Associated Press

China eases some virus controls, searches pedestrians

BEIJING (AP) — More Chinese cities eased some anti-virus restrictions as police patrolled their streets to head off protests Thursday while the ruling Communist Party prepared for the high-profile funeral of late leader Jiang Zemin. Guangzhou in the south, Shijiazhuang in the north, Chengdu in the southwest and other major cities announced they were easing […]
1 day ago
Associated Press

Australian jailed in Myanmar applauded in Parliament

CANBERRA, Australia (AP) — Sean Turnell, an Australian economist who spent almost two years imprisoned in Myanmar, received a hero’s welcome Thursday at Australia’s Parliament House where lawmakers rose in a standing ovation and the prime minister praised his courage, optimism and resilience. Turnell, an adviser to Myanmar’s elected leader Aung San Suu Kyi, was […]
1 day ago
FILE - In this Oct. 10, 2018, file photo Amazon Prime boxes are loaded on a cart for delivery in Ne...
Haleluya Hadero, Associated Press

Amazon says it had its biggest Thanksgiving shopping weekend

Amazon said Wednesday it had its biggest ever Thanksgiving holiday shopping weekend, aided by a record number of consumers looking for deals online amid high inflation.
1 day ago
FILE - European Council President Charles Michel arrives to meet with European Union foreign policy...
Associated Press

China’s Xi urges Ukraine talks in meeting with EU’s Michel

BEIJING (AP) — Chinese leader Xi Jinping urged negotiations on a political solution to the Ukraine conflict in talks with visiting European Council President Charles Michel in Beijing Thursday, state broadcaster CCTV said. Xi was quoted as saying that “solving the Ukrainian crisis through political means is in the best interest of Europe and the […]
1 day ago

Sponsored Articles

Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSPA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Redfin to cut another 13% of workforce, shutter RedfinNow