Side lays off 10% of its workforce, citing ‘market volatility’


Claiming it has grown faster than it could train, support and develop new hires, real estate tech startup Side is shedding around 10% of its workforce to prepare for the potential short-term impacts of ‘volatility’. market,” founder and CEO Guy Gal said in an email to employees on Wednesday.

San Francisco-based Side, which provides branding and technology to independent brokers and often serves as the broker of record for high-performing agent teams and independent brokers, said last summer it was on on track to go public after raising more than $250 million in funding, including a round that valued the company at $2.5 billion. In March 2021, Side earned “unicorn” status after announcing a $150 million funding round that valued it at over $1 billion.

But the rapid rise in mortgage rates this year has created uncertainty for many real estate and mortgage companies, as economists revise their forecasts for home sales this year and next.

Guy-Gal

“While demand for what we do continues to grow and our 2022 growth forecast is strong, the accelerated pace of our expansion and hiring has brought complexities and challenges that have slowed us down,” said Gal. in an email to employees reviewed by Inman. “We grew the team faster than we could train, support and develop everyone to meet the demands of changing roles and processes.”

On top of that, Gal said, “The economy is changing, with economists predicting market volatility. A weaker market could be good news for Side, as it’s likely to increase demand for our However, we need to prepare for potential short-term impact, which means we need to focus on investing in our long-term success during this volatile time.

In a written statement provided to Inman, Gal confirmed that Side has parted ways with “approximately 10%” of its employees.

“This decision, while incredibly difficult, was strategic and necessary,” Gal told Inman. “We have gone to great lengths to structure this change so that our agent partners receive the same level of brokerage services that they have come to expect from us.”

In his email to employees, Gal noted that Side has experienced “incredible growth over the past five years,” expanding to 15 new states in 2021 and more than doubling its revenue.

In January, Side announced that it had expanded to Washington, DC and Oregon, partnering with veteran agents in those markets.

In Washington, DC, Side partnered with agent Lindsay Reishman to create Pareto, a company billed as “a modern brokerage boutique.” In Portland, Oregon, Side and agent Drew Coleman formed Opt, a brokerage firm focused on the branding concept of offering a new “option” to buyers and sellers.

In his email to employees, Gal said the layoffs were “the right decision to serve the long-term interests of our community, corporate partners, financial supporters and shareholders (including all of you).”

In addition to paying severance pay, Gal said Side was extending the length of time that laid-off employees had to participate in the company’s equity program, “from month to year,” and accelerating the vesting schedule for those laid off. who had worked for the company for a shorter period. more than a year.

Gal called the move “very unusual…but it’s the right thing to do.”

He said Side “is fortunate to be generously funded, continues to grow well, and will continue to develop more of the world’s best real estate professionals into the world’s best real estate companies.”

Email Matt Carter

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