Opendoor cuts 500-plus jobs: Read CEO and co-founder Eric Wu’s email to employees – Times of India
Opendoor is letting go of about 550 people across all functions. The company’s chief executive and co-founder Eric Wu announced the job cuts in a blog post, noting that about 18% of the company’s workforce would be affected. The company had already scaled back over 830 positions earlier this year, primarily through a reduction in third-party resourcing, and eliminated “millions of fixed expenses,” according to Wu. The San Francisco-based Opendoor has been viewed as a changing force in the US residential real estate market. The company uses an algorithm to price homes, offers to purchase the properties with cash, makes necessary repairs and then resells the homes.
Opendoor went public in late December 2020 after completing its planned merger with the SPAC Social Capital Hedosophia Holdings II, headed by investor Chamath Palihapitiya. The eight-year-old company closed its first day of trading on the Nasdaq stock exchange at $31.25, “well above the $10 share price at which Social Capital sold shares in an April [2020] initial public offering,” per Crunchbase. The company, backed by a $400 million investment from SoftBank, was hit hard by the pandemic in 2020 and had cut 35% of its workforce then. Here’s the letter as it appeared on the blog.
Team,
I mentioned that the best leaders lead with their head and their heart. It’s with a heavy heart that I share this news today. For those who missed the Open House, we’ve made the difficult decision to reduce our team by ~550 people across all functions – approximately 18% of the company.
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. And while we may be navigating a once-in-forty year market transition, it doesn’t take away the difficulty, frustration, and sadness downsizing brings. We’ve built a culture and community of #oneteamonedream and worked tirelessly together to serve our customers. This is what makes our decision even more difficult.
When we embarked on this journey nine years ago, almost every investor I spoke with was shocked by the ambition and boldness of our mission – and that instead of an incremental approach, we were willing to do what is best and right for customers to change the entire system end-to-end. Doing something important is going to have its setbacks and ups and downs, but through this journey, we have done just that – we’ve begun the change the system needs. And, even in a moment like today, I can say that your impact has been the catalyst for change and that your work has enabled Julie Damavandi, Robin Race, Julie & Bela, and 200,000 other customers to make life-changing moves.
For those impacted, please know we’re doing everything we can to be fair and generous:
Severance pay:
Everyone leaving will receive ten weeks of pay, with an additional two weeks of pay for every full year beyond two years of tenure.
Health care coverage:
All current healthcare benefits will remain active for the rest of the month, then we will pay for three months of health insurance.
Job transition support:
We will also offer job transition support and launch an opt-in talent directory to help departing team members connect with new opportunities.
We want to provide clarity on next steps as quickly as possible. We’ll be sending an email to everyone at Opendoor within the next hour, which will let you know whether your role has been impacted or not. For those who will be leaving us today, you will also receive a calendar invite to meet with a leader to discuss this change, learn about your separation package, and ask questions.
I understand the burden and responsibility you all have placed on my shoulders, especially to those we are saying ‘goodbye for now’ to. And, that burden weighs heavy as we now have the task to ensure your hard work carries forward and we accomplish our mission. Thank you for showing up every day for our mission, to help our customers, and to change an antiquated industry. I’m grateful that you have helped build and shape Opendoor to where it is today. We promise to make you proud by building on the work you did during this time.
With a heavy heart,
Eric
Opendoor went public in late December 2020 after completing its planned merger with the SPAC Social Capital Hedosophia Holdings II, headed by investor Chamath Palihapitiya. The eight-year-old company closed its first day of trading on the Nasdaq stock exchange at $31.25, “well above the $10 share price at which Social Capital sold shares in an April [2020] initial public offering,” per Crunchbase. The company, backed by a $400 million investment from SoftBank, was hit hard by the pandemic in 2020 and had cut 35% of its workforce then. Here’s the letter as it appeared on the blog.
Team,
I mentioned that the best leaders lead with their head and their heart. It’s with a heavy heart that I share this news today. For those who missed the Open House, we’ve made the difficult decision to reduce our team by ~550 people across all functions – approximately 18% of the company.
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. And while we may be navigating a once-in-forty year market transition, it doesn’t take away the difficulty, frustration, and sadness downsizing brings. We’ve built a culture and community of #oneteamonedream and worked tirelessly together to serve our customers. This is what makes our decision even more difficult.
When we embarked on this journey nine years ago, almost every investor I spoke with was shocked by the ambition and boldness of our mission – and that instead of an incremental approach, we were willing to do what is best and right for customers to change the entire system end-to-end. Doing something important is going to have its setbacks and ups and downs, but through this journey, we have done just that – we’ve begun the change the system needs. And, even in a moment like today, I can say that your impact has been the catalyst for change and that your work has enabled Julie Damavandi, Robin Race, Julie & Bela, and 200,000 other customers to make life-changing moves.
For those impacted, please know we’re doing everything we can to be fair and generous:
Severance pay:
Everyone leaving will receive ten weeks of pay, with an additional two weeks of pay for every full year beyond two years of tenure.
Health care coverage:
All current healthcare benefits will remain active for the rest of the month, then we will pay for three months of health insurance.
Job transition support:
We will also offer job transition support and launch an opt-in talent directory to help departing team members connect with new opportunities.
We want to provide clarity on next steps as quickly as possible. We’ll be sending an email to everyone at Opendoor within the next hour, which will let you know whether your role has been impacted or not. For those who will be leaving us today, you will also receive a calendar invite to meet with a leader to discuss this change, learn about your separation package, and ask questions.
I understand the burden and responsibility you all have placed on my shoulders, especially to those we are saying ‘goodbye for now’ to. And, that burden weighs heavy as we now have the task to ensure your hard work carries forward and we accomplish our mission. Thank you for showing up every day for our mission, to help our customers, and to change an antiquated industry. I’m grateful that you have helped build and shape Opendoor to where it is today. We promise to make you proud by building on the work you did during this time.
With a heavy heart,
Eric
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