Homeward, an Austin, Texas-based company offering alternative financing for real estate, laid off about 20% of its staff this week.
In a 1,330-word message titled "A Note From Our CEO" posted to the company’s website blog on Wednesday, Homeward Founder & CEO Tim Heyl said the reduction in force “is necessary for our future success.”
The company employs about 600 people, so approximately 120 employees were affected.
“The market has changed dramatically in recent months: high inflation has persisted, interest rates are rising dramatically, and home sales have fallen from historic highs,” Heyl wrote in the blog post. “Coupled with affordability concerns, fewer buyers are seeking homes. There is also less demand for cash offer products that differentiate buyers in the homebuying process.”
Homeward offers Buy Before You Sell, which allows consumers to make a cash offer on their next home before selling their existing home, and Buy With Cash, which helps consumers make all-cash offers for home purchases. In his blog post, Heyl said Homeward, which operates in seven states, had its “strongest month ever.”
The “rapid cooling of the market,” however, has adversely affected Buy With Cash, which Heyl said “has had a sudden and sizable impact on our business.”
“Meeting the moment sometimes requires a business to evolve,” he continued. “Despite having a strong financial start to the year, we are currently staffed for more growth than we’re now forecasting. This reduction … is necessary for our future success, but that doesn’t make it easier to part with so many of our colleagues. Layoffs carry real consequences for people, and this isn’t a decision we make lightly.”
Heyl wrote that the company will offer affected employees tenure-based severance pay. It also has extended health benefits through the end of the month, and will contribute two additional months for employees who choose to extend their benefits with COBRA.
Homeward is also providing outplacement services, and “removing the non-compete clause for impact employees,” Heyl wrote.
“Finally, we want to recognize the contributions you made here with two changes to your stock options,” he continued. “First, we are removing the vesting ‘cliff’ for all impacted employees so that your stock options will now be vested based on the number of months you have worked at Homeward, even if you worked here less than 12 months. Additionally, we are extending the time period you have to exercise your stock options from 90 days to one year.”
Heyl concluded the blog post with an apology.
“For those of you leaving, I am sorry,” he wrote. “I know that you put your faith in us by joining our mission. And I let you down. Please know that your time here mattered and that your contributions will continue to serve as the groundwork for the next chapter of Homeward. We are so grateful to you. Thank you for believing in us.”
The layoffs come as many mortgage and real-estate industry businesses are slashing payroll, including Rocket Companies and loanDepot. Even United Wholesale Mortgage has reduced its staff, saying levels are down by about 1,000 workers through “natural attrition.”
