CEO Glenn Kelman sent this email to all Redfin employees at 8 am (Pacific Daylight Time) on June 14, 2022. Removed the link to the intranet and his cell phone number for public posting.
We’re sorry, but today about 8% of our employees are asking us to leave Redfin. Also, including the people of Rent Path and Bay Equity, it is about 6%. For the next few hours, the manager will call those who are leaving. When the call is over, I will send you a note. To answer your questions, we will hold a brief all-members meeting at 11:00 am Pacific Daylight Time. You can submit this meeting using this form. Redfin will also announce the layoffs to the public and post this message on their blog.
Demand is 17% off
We apologize to all the departures who have trusted Redfin, but we are unable to maintain our commitment to our customers. Demand in May is 17% lower than expected, resulting in a shortage of agents and support staff jobs, and low sales, resulting in low funding for the headquarters project.
2-4 months Severance
It provides a 10-week base salary to dismissed colleagues, adds a weekly salary for every 12 months of work over a year, and is capped at a 15-week salary. For agent and support roles, severance pay includes an estimated productivity or sales bonus. We also pay retired employees the cost of extending their medical insurance for three months. This should give you until the end of summer to find a job.
I said we wouldn’t fire people unless we had to. we have to.
Layoffs are always a terrible shock. This is especially true when you’ve made a fuss to avoid layoffs and raised hundreds of millions of dollars, so you don’t need to fire people after just a few months of uncertainty. .. However, mortgage rates have increased faster than at any point in history. Home sales can last for years instead of months, but Redfin will continue to thrive. I don’t know what will happen if the company doesn’t work even if it goes down from $ 97 to $ 8 per share.
It’s time to make money
Today we are losing a lot of good people, but in order for the rest to want to stay, we need to increase the value of Redfin. And to increase our value, we must make money. We owe it to everyone who has invested your time and treasure in this company to make a profit and make a lot of money.
Today’s layoffs are the result of Redfin’s lack of income, rather than letting people go. But months before this layoff, our culture has undergone significant changes towards performance and profits. There is a reason why only Redfin is hiring our agents among our brokers. That is to maintain a higher standard. Jason Aleem agreed to become a brokerage firm leader in February, subject to operating as an elite sales organization. You can refer an agent to 12 customers each month only if you are confident that the agent is best for you. And if you want to keep your front-line agents at a high standard, you need to apply the same standards to all of us behind them. Turning people on with the first signs of weakness is not soulful. However, accepting mediocrity is not soulful. Having a soul is the way we find our way between those two poles.
Profit-driven decision making
Another big difference between Redfin and other brokers is the level of investment in software and support. This includes coordinators and support agents, field managers, renovators, offer specialists and title specialists. There is also a reason for that. It is to give our customers and ourselves a competitive advantage. Our software and support is the best in the industry. But if agents, lenders, and customers don’t pay for software and support improvements and instead prefer to work with a company that has less overhead and is more economical, they can’t. This is an area that all leaders, not just executives, need to embrace. Fewer projects. A small team. A short document. There is little analysis. Don’t make it complicated.
Where we are cutting
For every project you start, you need to think about another project to stop. Fewer engineers are added to these tools because the team has already built tools for collaborating in transactions. You spend less on analytics and user surveys. When we were alienating tens of thousands of customers in 2020 and 2021, we had to hire 1,000 employees a month to catch up, requiring a tremendous level of recruitment, training and licensing. It is inevitable that these groups will be hit hardest today.
What we are still funding
What we are still investing in is exactly what our agents, lenders and customers value most. An in-situ tour to see the house first. Low price to list customers who need all the pennies from their property for the next stage of their life. Remodeling to sell Redfin Now and homes quickly at high prices. Other innovative services that only Redfin agents can offer to their customers. We will also look for ways to invest more in agents that can drive the company’s growth. Any agent can meet their first customer through Redfin.com, but the best agents will cultivate repeat and referral sales through those customers over time.
Still a place for big bets
We continue to make big bets, but only if there is a big reward. That is, the range of traffic to your site, your success, and the services you can provide to your customers. By 2022, we are betting millions of dollars on better intermediary services because we are confident that our customers will be more successful and our most profitable businesses will be more efficient. By becoming a complete real estate destination, you are betting on rental properties as you can outperform your rivals in traffic and add billions of values. We are investing in online tools to guide Redfin Now’s offers. This should lead to faster service and more profit. As you move your software to the cloud and deploy more innovations from more teams, you’ll improve reliability and reduce maintenance costs. If you want to make big bets, get to know your customers better than anyone else. Be honest with yourself as to whether the results are important to your customer. If you don’t get results, reduce the loss.
Where are you going from here
Redfin grows slowly due to sluggish housing, but it still grows and gains market share. As before, the world will cancel us. The most painful thing is the effort that some people have to experience to consider themselves good employers. Part of the good thing is to accept our determination to do better when the company goes below it. We broke our commitment to our employees twice in three years. Today, and every day, you can’t shrink from doing the best for the whole company, not just part of the company. But I spend the rest of my life wondering how I could avoid these layoffs. The most important thing now is to deal with people who leave with humanity and respect. As always, you can call me or email me to get help with venting, sadness, asking questions and understanding your next move. A list of frequently asked questions about layoffs can be found on the intranet.
Thank you. Glenn