REX Homes yesterday initiated a second round of layoffs in the past two months, has now shut down operations in Chicago and all of New York as part of a company restructuring, and intends on testing out joining local MLSs.
Layoffs are a common part of startup life, and REX Co-Founder, President, and COO, Lynley Sides assured remaining employees in a company-wide call that they are “done with downsizing efforts,” which they say they did their best to do “respectfully,” and the new goal is to move forward, focusing on the customer experience, on profitable markets, and on “winning” now that the company has “the right plan.”
The first round of layoffs was in late August and eliminated roughly 60 positions (a number which has not yet been verified by REX). No severance was paid, but the company offered resume coaching and allowed impacted staff to retain all company technology as a “creative” move, Sides said on the call.
The company has earned several rounds of private equity funding and is not publicly traded. They had not closed their Series D round of funding in August, but did shortly thereafter.
The second round of layoffs was Thursday, October 7th and impacted 34 employees who did receive severance and were also allowed to keep company technology.
Because of the timing of the Series D closing, Sides told staff on the call that they would be revisiting severance with employees cut in the first round.
She also noted that they would have preferred one round of layoffs and had hoped that would suffice, but instead took measures to cut “all costs,” including reducing marketing spends “notably,” addressing overhead, negotiating with vendors, and even subleasing some of their space to “reduce the impact of the second wave.”
It is unclear what markets they continue to serve as their website still allows users to select New York, but not Chicago, and several past and current staff say the number of areas they service have been drastically reduced in this calendar year but none agree on the actual number. Sides noted a shift toward focusing exclusively on the most profitable markets.
Sides also said on the call that REX would be “trying to join a few MLSs which is the right thing to do for our business and our customers” as they focus on the “customer experience.”
The pilot test is notable given the company’s lawsuit against NAR and Zillow, alleging a cartel surrounding MLSs and commission structures. Although a recent court ruling urged the company to not use the term ‘cartel,” the lawsuit stands.
Also fascinating is that the real estate tech startup was able to avoid all news coverage of the layoffs, market closings, or a shift toward joining any MLS.
Regardless, Sides concluded her portion of the call by assuring her teams that she remains “incredibly optimistic about REX’s future,” a sentiment others on the call echoed.
We have reached out to REX Homes for comment, as we don’t know the precise number of employees dismissed in August, the size or date of their Series D round of funding, or what markets they still serve.