U.S. IBuyer Opendoor announced layoffs of 550 people, or 18% of its staff, citing business challenges in “one of the most challenging real estate markets in 40 years.”

Company CEO Eric Wu disclosed the layoffs in an open letter to staff Wednesday on Opendoor’s website.

Wu wrote that the cuts impact staff “across all functions” of the publicly traded company. They follow an earlier cut in capacity of 830 positions, although most of those were third-party contractors, Wu wrote.

The company has also “eliminated millions of fixed expenses,” Wu wrote.

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

The CEO indicated the company would provide a minimum of 10 weeks severance pay to laid off staff and would extend healthcare benefits though the end of November, and three months beyond that. The company will also offer “job transition support” for those who want it, Wu wrote.

With average home prices dropping across the U.S. over the past several months, Opendoor has found itself underwater on many of the homes it’s purchased for resale.

Although the company reported record revenue and positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in Q2, it warned investors that Q3 would be much worse, forecasting for negative EBITDA of as much as $175 million.

In August, Opendoor reportedly grossed less than it paid on 42% of its home sales nationwide. In Phoenix and L.A., it posted negative returns of 75% and 55% of sales, respectively.

Rubbing salt in the wound, the Federal Trade Commission recently affirmed a $62 million fine against Opendoor for misleading customers.

Rising mortgage rates and slumping home sales have pushed dozens of lenders and real estate companies to shed staff over the last year. They include mortgage lender Better.com, nationwide brokerages Redfin and Compass, and residential portals Realtor.com and Zillow.

Opendoor is scheduled to report its Q3 2022 earnings tomorrow (November 4).

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