iBuyer declined to confirm how many employees were laid off. Recent SEC filings show significant cuts compared with a year ago.
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Arizona-based iBuyer Offerpad confirmed on Friday that it has laid off employees and restructured its team. A few days after the report Continued declines in sales and revenue have sent its stock price to all-time lows.
The company declined to comment on how many employees it had laid off, saying only that it hoped to return to profitability.
“We have made some operational changes, including restructuring certain teams to better align with our strategic goals,” an Offerpad spokesperson told Inman. “These changes are designed to improve our efficiency while maintaining the core of our business – Our cash offer.”
The company said it is focusing on its automated valuation model, which helps it price homes as part of its fast cash offer process.
“While we are not disclosing specific numbers on the number of people affected or the details of team adjustments, what we can share is that we have made strategic operational changes across multiple divisions to improve our operational efficiency and strengthen our core business.”
When Offerpad reported second-quarter earnings, it said it reduced headcount in three areas: sales, marketing and operations; general and administrative; and technology and development.
Offerpad reported an $8.8 million, or 30%, reduction in second-quarter selling, marketing and operating expenses, primarily a $7.4 million reduction in advertising expenses. The company said these efforts to reduce expenses were partially offset by higher variable costs related to an increase in sales of homes.
General and administrative expenses decreased by $2.2 million due to lower expenses related to credit facilities and headcount reductions, while technology and development costs decreased by $1.3 million “primarily due to a reduction in average headcount.”
Offerpad also wrote that it cut technology and development expenses by more than half, noting that the reduction was “primarily due to a reduction in average headcount.”
Offerpad’s net loss in the second quarter was $13.8 million, a 21% decrease from the $17.5 million loss in the first quarter and a 38% decrease from the $22.3 million net loss in the first quarter of 2023.
However, revenue during the spring home-buying season also fell 12% from the first quarter to $251.1 million, and home sales fell 12% to 742 units.
Offerpad said it expects revenue to continue to decline in the third quarter, to between $185 million and $225 million, and home sales to fall to between 550 and 650 units.
“We are committed to supporting our transition team members and have provided meaningful severance and support services,” the spokesperson said. “Our focus remains on leveraging our proprietary technology and market expertise to deliver exceptional value to our clients in this dynamic real estate market.”
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