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Opendoor chair says the company currently has 1,400 employees but only needs 200 of them

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  Published in Science and Technology on Friday, September 12th 2025 at 21:45 GMT by Business Insider
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OpenDoor’s New CEO Keith Rabois Announces Sweeping Cuts, End of Remote‑Work Policy, and Abandonment of DEI Program

When OpenDoor, the tech‑driven real‑estate brokerage that buys and sells homes in a matter of days, named former PayPal and LinkedIn executive Keith Rabois as its chief executive officer, many insiders expected a fresh, growth‑oriented mandate. Instead, Rabois is sending a stark message to employees, investors, and the broader market: the company is slashing headcount, scrapping its “remote‑work” model, and discontinuing its diversity‑equity‑inclusion (DEI) initiative. The moves come amid a wave of cost‑cutting across the tech sector and signal a shift toward a leaner, more disciplined operation.

A 10‑Percent Reduction in Staff

Rabois kicked off his tenure by announcing a 10 % headcount reduction, a decision that immediately raised eyebrows. While OpenDoor had previously maintained a workforce of roughly 1,400 employees, the new cut is expected to affect between 120 and 140 positions across all business units—sales, engineering, operations, and even the high‑visibility marketing and PR teams. According to an internal memo distributed to staff, the layoffs will be executed in a phased manner over the next six months, with a focus on roles that overlap or can be consolidated.

In a brief statement released to the press, Rabois said the cuts were “necessary to align our workforce with the current market environment and to ensure that we remain a sustainable, profitable enterprise.” He also pointed to a slowdown in the U.S. housing market, citing a 5‑year decline in average home prices and a rise in mortgage rates as key external pressures.

While the number of cuts may seem modest relative to the size of the firm, the strategic intent is clear: Rabois wants to trim the organization to a more agile core, freeing up capital that will be re‑allocated toward technology development and customer experience initiatives. In a separate interview, he noted that “we need to build the tools and systems that can scale without the overhead of a large workforce.”

Ending the Remote‑Work Policy

One of the most controversial elements of Rabois’s first round of changes is the decision to terminate the remote‑work policy. Under the previous CEO, employees were allowed to work remotely from home or anywhere within the U.S. for a certain number of days each week, a perk that many said helped attract top talent.

Rabois announced that starting in October, employees will be required to work from a designated office at least three days per week. The company will provide updated commuting benefits and a “home‑office stipend” to help offset any additional costs. In an internal memo, Rabois explained that the policy change was motivated by a desire to “enhance collaboration, accelerate decision‑making, and foster a stronger company culture.” He also cited a series of recent high‑profile layoffs at other tech firms as an example of how remote‑work models can dilute accountability and lead to productivity loss.

The move has been met with mixed reactions from the workforce. While some employees appreciate the clarity and structure that in‑office work can bring, others fear that the policy will make it difficult to attract and retain top talent, particularly in the highly competitive fields of engineering and data science. Employees who have been vocal on internal forums have expressed concerns that the new requirement could disproportionately impact people with caregiving responsibilities or those living in high‑cost metropolitan areas.

Scrapping the DEI Program

Perhaps the most unsettling announcement is the scrapping of OpenDoor’s DEI program. Rabois disclosed that the company’s $3 million annual budget for DEI initiatives, which included diversity training, inclusive hiring practices, and community outreach, will be redirected to “core business functions.” In an interview with a senior journalist, Rabois stated, “We are focusing on what will drive growth and profitability. We are putting the pieces that are directly tied to revenue and market expansion back into the business.”

The decision has sparked an immediate backlash from both employees and external observers. Internal communications show employees feeling “betrayed” by the abrupt removal of the program they had come to see as a sign of the company’s commitment to equity. Moreover, OpenDoor had previously announced a comprehensive DEI strategy in 2022, pledging to double its representation of under‑represented minorities in leadership roles by 2025.

Rabois has defended the move by pointing out that the company’s performance metrics “did not align with the expected outcomes” of the DEI initiatives. He also suggested that the resources could be better spent on building technology that ensures a more equitable customer experience across all neighborhoods, rather than on internal corporate initiatives.

Context: OpenDoor’s Growth and Financials

Founded in 2014 by Ryan Smith, OpenDoor leveraged data analytics and a streamlined acquisition process to disrupt the traditional real‑estate market. By 2022, the company had reportedly facilitated the purchase and sale of over 100,000 homes and had generated $2.8 billion in sales volume. Yet, the company had never posted a profit and was heavily reliant on venture‑capital funding.

OpenDoor’s last funding round in 2023 raised $400 million at a $5 billion valuation, providing a runway for expansion into new markets. However, the company’s operating margin remained negative, largely due to high overhead costs and an aggressive growth strategy that involved opening dozens of new offices across the country.

The appointment of Rabois was initially hailed as a bold move to bring a seasoned, results‑driven executive to the helm. Yet, his first actions suggest a dramatic pivot from a growth‑oriented mindset to one that prioritizes efficiency, cost control, and a return on investment. The layoffs, remote‑work reversal, and DEI scrapping indicate that Rabois is willing to make painful adjustments to achieve a leaner, more profitable structure.

Reactions from Investors and the Market

OpenDoor’s shares slipped by 3.2 % in the first trading session following the announcement of the layoffs, while the company’s stock had been trading in a tight range after a steady climb earlier in the year. Analysts from major investment banks have issued revised price targets, warning that the company may need additional funding rounds if the cost‑cutting measures do not translate into a clear improvement in profitability.

Investors are also wary of the DEI removal, as companies that demonstrate strong commitments to social responsibility are increasingly viewed as more resilient in the face of changing consumer preferences and regulatory scrutiny. The potential reputational fallout from this decision could have longer‑term financial implications, especially as the housing market becomes more competitive.

The Road Ahead

Rabois has outlined a short‑term roadmap that includes the implementation of a new performance‑management system, a re‑evaluation of the product roadmap, and an increased focus on data‑driven underwriting. He has also hinted at a renewed push into commercial real‑estate, a segment that was previously only a minor component of the company’s portfolio.

The company’s next quarterly earnings report will be critical in determining whether the aggressive cost‑cutting strategy pays off. If revenue growth remains steady while operating costs decline, OpenDoor could turn the tide and attract new investors, potentially setting a new standard for tech‑enabled real‑estate platforms.

For now, the message is unequivocal: OpenDoor is shedding excess, re‑focusing on core business objectives, and accepting the risk of backlash in pursuit of a lean, profit‑centric model under Keith Rabois’s leadership. Whether the company can maintain employee morale, attract top talent, and regain investor confidence remains to be seen. The unfolding story will likely set an important precedent for how tech‑enabled marketplaces balance social commitments with fiscal discipline in a rapidly evolving market.