For the third time in the past year, Divvy Homes is decreasing its workforce.
The rent-to-own protech startup is laying off 95 employees across the country, Inman reported. The company last week filed WARN Act notices saying the cuts will affect employees in 21 states.
The WARN Act notice filed in California disclosed that the cuts were expected to take effect on Nov. 7. The layoffs include senior managers like Divvy’s chief legal officer, vice president of compliance, head of design, head of brokerage, head of asset management and national escrow officer.
Last fall, the housing downturn brought on by the rise of interest rates and mortgage rates led Divvy to cut 12 percent of its staff, representing roughly 40 employees at the time. Months later, the startup laid off an undisclosed number of employees.
A person familiar with the matter told TechCrunch that nearly half of the company’s employees were cut in the most recent round. Back-of-napkin math suggests the layoffs leave 100 employees or fewer at the company, a tough development for a company that once sported a $2 billion valuation.
The cuts were blamed on macroeconomics, capital costs and a need to conserve cash, the source told TechCrunch. Divvy’s model requires customers to put away part of their paycheck toward a down payment, a savings plan that results in higher monthly outlays for tenants.
Divvy did not respond to a request for comment from The Real Deal and hasn’t publicly commented on the layoffs. An email to the vice president of communications and public relations bounced back, suggesting they were part of the layoffs.
The San Francisco-based startup owned 7,000 homes across 19 markets as of two years ago, a portfolio valued above $1.7 billion. Customers of the rent-to-own program recently came out of the woodwork to bemoan inadequate repairs and rising eviction threats.
Divvy’s investors include Andreessen Horowitz, Tiger Global Management and Caffeinated Capital. A $200 million funding round in August 2021 brought the company to its $2 billion valuation.
— Holden Walter-Warner