Clear Capital, a real estate valuation technology company and firm, is laying off 27% of its staff months after freezing mass hiring, TechCrunch has learned from sources.
A spokesperson for Clear Capital confirmed the layoffs to TechCrunch but did not share the specific number of employees impacted. Last November, the company announced they had 1,400 total global employees, so using that figure the layoff could have impacted 378 employees.
The reduction primarily impacted its operational team, according to sources.
“Clear Capital is restructuring all company divisions to reduce expenses and support our future business strategy amidst today’s housing market reality,” said Duane Andrews, CEO of Clear Capital in a written statement to TechCrunch. “This will allow us to refocus the business on key areas and ensure we are on track for sustainable growth.
The CEO also cited ”the impact of a rising interest rate environment in the mortgage industry has resulted in a significant decrease in volume from our customers,” as a reason for the layoffs.
The company did not explain what type of severance, if any, was offered to employees.
In an internal memo sent to employees obtained by TechCrunch, Andrews explained Clear Capital executives had anticipated a decrease in work volume over the summer but did not expect to make cuts come fall.
“Keeping folks engaged and contributing was necessary; our forecasts showed that the Fall would bring increased volume,” read Andrews’ memo. “As we approached Fall, the markets stated indicating otherwise, and we now know volume will not return for a significant period of time.”
Andrews added the decision to cut staff and locations was “a last resort” and “there are no guarantees” that further cuts won’t be made.
Sources explained employees were required to attend an “abrupt” Google Meet call at 9 a.m. PST on Wednesday. Once in, they were split into two groups: those that would remain and those laid off. Employees were told back in August that there would be no layoffs, sources say.
Sources declined to comment on the record due to fear of retaliation, and because they said Clear Capital advised employees not to speak to the press.
According to a meeting call recording obtained by TechCrunch, Clear Capital’s Vice President of Customer Success Heather Shick and Executive Vice President of Customer Experience Luke Fredrick addressed the layoffs to employees and asked for those staying to feed into their “grit.”
“Everything that we planned on with this was so that we didn’t need to do it again,” Shick said, “Our goal is to not have this meeting a second time, but there is no guarantee. Your workloads are going to change. You’re going to be busier. We are all going to be busier, and it’s going to be tough.”
Shick further explained in the call that inflation rates in the real estate investing market led to the company’s decision.
Inflation rates have surged drastically after the COVID-19 pandemic and have impacted the real estate space. As the once-hot market begins to freeze, the rate hike has brought into question if there will be a potential recession.
The Reno, Nevada-based company claims to be the “leader in property valuation management and data solutions,” and works as the middleman for banks, investors and homeowners. Last year, the company bought CubiCasa, a Finland-based floor planning app for iOS and Android for an undisclosed amount. Despite the company’s signs of growth, it was facing declines in customer volume to which Clear Capital cites macroeconomic conditions.
Employees laid off explained that the decision was unexpected and caught them by surprise. One source told TechCrunch they “feel in shambles.”
During the meeting, Clear Capital announced it would be closing its Truckee, California office and said there will be no operational staff in its Roseville, California location. Those still employed are expected to return back to in-person work on October 24.
Current and former Clear Capital employees can contact Andrew Mendez by e-mail at andrew.mendez@techcrunch.com or on Signal, a secure encrypted messaging app, at 669-832-6800.
Source @TechCrunch
