Opendoor lays off 18% of workers in wave of housing cutbacks

Opendoor Technologies Inc. is laying off about 550 employees after higher mortgage rates cratered U.S. housing demand.

The layoffs will reduce Opendoor’s headcount by about 18%, according to a company blog post. The cuts come after an abrupt shift in prices forced the company to sell homes for less than it paid for them. Other housing companies, including Zillow Group Inc., Compass Inc. and Redfin Corp., have laid off workers in recent months.

“The reality is, we’re navigating one of the most challenging real estate markets in 40 years and need to adjust our business,” Chief Executive Officer Eric Wu wrote. “To manage through the turbulence in the market, we’ve worked quickly over the last two quarters to reduce our operating expenses.”

Opendoor, which practices a data-driven spin on home-flipping called iBuying, will report third-quarter results after the close of trading Thursday, when it is expected to post losses of $171 million before interest, taxes, depreciation and amortization, according to the average of analyst estimates compiled by Bloomberg. 

Shares traded at $2.39 at 11:46 a.m. in New York, down 84% from the beginning of the year.