clear capitala property appraisal company and technology firm, is laying off 27% of its staff months after freezing massive hiring, TechCrunch sources have learned.
A spokesperson for Clear Capital confirmed the layoffs to TechCrunch but did not share the specific number of employees affected. Last November, the company announced that it had 1,400 total employees worldwideso using that figure, the layoff could have affected 378 employees.
The reduction mainly affected its operational team, according to sources.
“Clear Capital is restructuring all divisions of the business to reduce expenses and support our future business strategy in the current housing market environment,” Clear Capital CEO Duane Andrews said in a written statement to TechCrunch. “This will allow us to refocus activity on key areas and ensure that we are on the right track for sustainable growth.
The CEO also cited “the impact of a rising interest rate environment in the mortgage industry has resulted in a significant decrease in volume from our customers”, as the reason for the layoffs.
The company did not explain what type of severance, if any, was offered to employees.
In an internal memo to employees obtained by TechCrunch, Andrews explained that Clear Capital executives had anticipated a decrease in work volume over the summer but did not expect to make any cuts in the fall.
“It was necessary to keep people engaged and contributing; our forecast showed that the fall would bring increased volume,” Andrews’ memo read. “As we approached the fall, the markets indicated otherwise, and we now know that volume will not return for a significant period of time.”
Andrews added that the decision to reduce staff and locations was “a last resort” and “there is no guarantee” that further reductions will not be made.
Sources said employees were scheduled to attend a “rough” Google Meet call at 9:00 a.m. PST on Wednesday. Once inside, they were divided into two groups: those who would stay and those who would be fired. Employees were told in August that there would be no layoffs, sources said.
Sources declined to comment on the case for fear of retaliation and because they said Clear Capital advised employees not to speak to the press.
According to a meeting call recording obtained by TechCrunch, Clear Capital vice president of customer success Heather Shick and executive vice president of customer experience Luke Fredrick addressed the layoffs to employees and demanded for those who remained to feed their “courage”.
“Everything we planned with this was so that we wouldn’t have to do it again,” Shick said, “Our goal is not to have this reunion a second time, but there’s no guarantee. Your workloads are going to change. You’re going to be busier. We’re all going to be busier and it’s going to be tough.”
Shick further explained in the call that inflation rates in the real estate investment market drove the company’s decision.
Inflation rates increased significantly after the COVID-19 pandemic and impacted real estate space. As the once-hot market begins to freeze, rising rates have called into question whether there will be a potential recession.
The Reno, Nevada-based company claims to be the “leader in real estate appraisal management and data solutions” and works as a middleman for banks, investors and landlords. Last year the company bought CubiCasa, a Finland-based floor planner app for iOS and Android for an undisclosed amount. Despite signs of business growth, it was facing a decline in client volume to which Clear Capital cites macroeconomic conditions.
The terminated employees explained that the decision was unexpected and took them by surprise. A source told TechCrunch that they “felt in shambles.”
During the meeting, Clear Capital announced that it would be closing its Truckee, Calif. office and said there would be no operational staff at its Roseville, Calif. location. Those still employed are expected to return to work in person on October 24.
Current and former Clear Capital employees can contact Andrew Mendez by email at [email protected] or on Signal, a secure encrypted messaging app, at 669-832-6800.