In a recent interview with CNBC, Keith Rabois, co-founder and newly appointed board member of Opendoor, criticized the company’s current workforce, suggesting that it is excessively large and needs substantial cuts. With 1,400 employees on board, Rabois expressed skepticism about the necessity of such a staffing level, stating, “I don’t know what most of them do,” and proposed that the workforce could be reduced to around 200 employees.
Rabois’s remarks come in the wake of significant upheaval within the company, especially following the resignation of former CEO Carrie Wheeler last month. Kaz Nejatian, previously the Chief Operating Officer at Shopify, has since taken over as CEO. Rabois emphasized the need for cultural and operational changes to steer Opendoor back to its foundational principles after a series of challenges that culminated in a risk of delisting from the Nasdaq stock exchange earlier this year.
The situation escalated in late May when Opendoor’s financial struggles became apparent, prompting activist investors, including Eric Jackson of EMJ Capital, to rally for change. This pressure contributed to a rebound in the company’s share price, but it was also evident that leadership needed to shift. Rabois firmly believes Nejatian has the capabilities necessary to unlock the company’s potential, especially in harnessing data and assets in an increasingly competitive AI landscape.
As discussions about potential layoffs loom, Rabois did not specify a timeline or size for any reductions, only noting he has not thoroughly examined Opendoor’s financials. However, he hinted at a significant need for change, citing a bloated general and administrative (G&A) structure that had become untenable amidst rising interest rates and a slowdown in real estate transactions.
Rabois also criticized the company’s current culture, which he described as “broken.” He pointed out that the embrace of remote work and diversity equity and inclusion initiatives had detracted from the collaborative spirit that originally fueled Opendoor’s innovation. Rabois affirmed, “We’re going to restore it. We’re going to return to our roots,” indicating a shift back towards in-person work and a renewed focus on the company’s foundational principles.
Rabois underscored the importance of instilling “discipline and rigor” into Opendoor’s operations, reflecting on how Nejatian successfully decreased G&A expenses at Shopify. This aspect was one of the key reasons for Rabois’s excitement about Nejatian’s recruitment, as he aims to implement similar strategies at Opendoor.
Despite recent challenges, Rabois remains optimistic about Opendoor’s prospects, stating, “We’re going to transform the way people buy and sell houses.” He countered the narrative that iBuying has lost its appeal, arguing instead that it is a complex business requiring adept management. Rabois maintains that Opendoor’s value proposition—offering certainty, convenience, and peace of mind—remains incredibly compelling and suggests that greater awareness of this potential could foster renewed interest in the company’s services.
Efforts to contact Opendoor for further comments have been initiated.
