Austin-based real estate startup Homeward is laying off dozens of employees amid market changes and declining demand for home-buying, according to the company’s CEO.
Founded in 2018, Homeward operates a digital platform that helps users buy and sell homes. CEO and founder Tim Heyl also founded the Austin-based real estate brokerage firm Heyl Group.
Homeward will furlough about 20% of its workforce after a nationwide drop in real estate demand, Heyl said in a blog post.
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Homeward did not respond to requests for comment and did not disclose its current employee count. The total number of employees at the company was his 400, including his 150 in Austin, according to Built in Austin, an Austin-focused tech industry information site.
In a blog post, Heyl said affected employees will receive tenure-based severance benefits, as well as health insurance benefits through the end of August, outplacement services from our recruiting team, and stock options without a vesting cliff. He said he accepted the offer and was under no non-compete obligation. Clause.
“We are off to a strong financial start to the year and are now staffing for better-than-expected growth,” said Heyl. “This layoff…is necessary for our future success, but it doesn’t make it any easier to say goodbye to many of our colleagues. Layoffs have serious consequences for employees. is not a decision we take lightly.”
“The continued acceleration and severity of market change has forced us to look at deeper changes in our business. These headwinds represent the wider challenges facing our economy. We need to come up with a plan to slow down the market, as we don’t know how long the softness in property prices will last.”
Homeward was created to help buyers buy new homes before selling their existing homes. The start-up offers credit to buy new homes all for cash, then buys your home back from Homeward when your mortgage is ready. The company can also list existing homes and buy new homes before selling. If the house doesn’t sell within six months, Homeward will buy it for a pre-determined price.
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According to the Austin Chamber of Commerce, real estate startups have boomed in recent years, with at least 30 tech companies focusing on the real estate market in Austin.
But Heyl said the industry has taken a hit recently.
“The market has changed dramatically in recent months. High inflation persisted, interest rates rose dramatically, and home sales fell from historic highs. There is also less demand for cash offer products that differentiate buyers in the home buying process,” he said.
Homeward operates in over 20 markets, including Austin, Houston and Dallas. The company recently expanded to Oregon and Washington.
The layoffs follow a period of rapid growth for Homeward, which has hired more than 250 people in 2021 alone.
Homeward raised $371 million in funding last year, which it said it would use to grow its business, meet demand and expand into new markets. In 2020, Homeward raised his $105 million funding round.