Whether its cutting pay, changing the business model to accommodate, or laying off non-essential staff, portals across the globe are scrambling to save money and stay afloat during this market crisis.
Most recently, US property portal, Redfin, announced a SEC filing in which it will lay off 7% of its salaried staff and furlough 41% of its agents until September 1.
Redfin CEO, Glenn Kelmann, explained that the furloughed agents will still receive a transition bonus as well as healthcare benefits throughout the summer. The 7% who were laid off were those who hadn't yet met with customers or completed their training before the offices closed in accordance to stay-at-home orders.
The property portal explained that the company took into consideration the recent $2 trillion stimulus package from the federal government when making its decision. Redfin reported that an estimated 75% of its real estate agents would earn more from unemployment than they would from commissions through Redfin at this time. This is assuming every state opts into the CARES Act legislation.
Redfin agents make profit through commission and with the decrease of sales at this time, that profit has taken a nosedive. Redfin's higher ups have kept that in mind as they decided to furlough these agents.
Redfin isn't the only property portal making hard decisions. Many are offering their services for free in hopes that website traffic stays up and services are still in use. Others are offering their services virtually, from valuations to auctions to closing the deal. Redfin is looking out for its agents when making a decision like this, what happen next depends on the markets trajectory.