Item 2.05 Costs Associated with Exit or Disposal Activities.
On
Winding down RedfinNow is a strategic decision we made in order to focus our resources on our core businesses in the face of the rising cost of capital.
The remaining workforce reductions are primarily among our real estate services
and headquarters employees in response to macroeconomic conditions. This
workforce reduction will reduce our number of lead agents by approximately 197,
which represents 9 percent of total lead agents. This action comes in the wake
of our June workforce reduction, which was a response to slowing 2022 home
sales. Since June, mortgage interest rates have continued to climb and
expectations for home sales have come down even further. Today's workforce
reduction assumes a housing downturn that lasts at least through 2023. Since
Regarding RedfinNow, we expect to continue to complete the purchase of homes we
are contractually obligated to purchase and to renovate and sell such properties
quickly. As of
In connection with the preparation of our financial statements for the third
quarter of 2022, we recorded an
As a result of the workforce reduction and wind-down of RedfinNow, we expect to
incur pre-tax charges of approximately
1
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Forward-Looking Statements
This report contains forward-looking statements within the meaning of federal
securities laws, including our future operating results and the estimated range
and timing of the charges, write-downs, and cash outlays resulting from our
expected workforce reduction and wind-down of RedfinNow operations. We believe
our expectations related to these forward-looking statements are reasonable, but
actual results may turn out to be materially different. Factors that could cause
actual results to differ materially from the forward-looking statements include
our inability to successfully implement the workforce reduction and wind-down of
RedfinNow; unanticipated developments that may delay or increase the costs
associated with our wind-down activities; a change in the number of employees
being terminated as part of the workforce reduction; our inability to complete
the purchase of homes we are contractually obligated to purchase and renovate,
market, and close on the sale of homes currently in inventory during the
wind-down of RedfinNow; disruptions in relationships with customers, suppliers,
vendors, broker partners, contractors, employees, lenders, and consumers given
our decision to wind-down RedfinNow operations; and changes in our access to and
the availability of financing on terms acceptable to us to finance the purchase
of homes through RedfinNow during the wind-down of RedfinNow. For additional
factors, please see the risks and uncertainties identified under the heading
"Risk Factors" in our annual report for the year ended
Item 7.01 Regulation FD.
The estimated severance and related costs described in item 2.05 were not
included in our third quarter 2022 guidance that we had provided on
On
Item 9.01 Financial Statements and Exhibits.
Exhibit Number Description 99.1 Article published November 9, 2022 104 Cover page interactive data file, submitted using inline XBRL 2
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