Opendoor Technologies writes down inventory by $573 Million, lays off 18% of their employees due to the declining real estate market related to the impact of higher interest rates leading to lower transaction volume. The company announced that they decided to drop the selling prices of the homes they acquired to exit the deals quicker, preventing greater losses in the future.
The CEO of Opendoor, Eric Wu, gave general plans about a new marketplace where buyers and sellers can buy and sell homes without listing them via an agent and the MLS.
Writing on the company website Wu said:
“The reality is, we’re navigating one of the most challenging real estate markets in 40 years and need to adjust our business. To manage through the turbulence in the market, we’ve worked quickly over the last two quarters to reduce our operating expenses. Prior to today, we scaled back our capacity by over 830 positions — primarily by reducing third party resourcing — and we eliminated millions of fixed expenses. We did not make the decision to downsize the team today lightly but did so to ensure we can accomplish our mission for years to come,” he added.
Opendoor stock is down 90% in 2022.