Houzz, an online platform for home renovation and design, has laid off 155 employees, roughly 10% of its staff, per an internal memo obtained by TechCrunch. Executive salaries also took a cut.
The company, last valued at $4 billion, confirmed the content of the memo in a statement to TechCrunch.
“Due to the impact of COVID-19 on small businesses in the home renovation and design space, and the resulting impact on our core business of pro subscriptions, we have made the incredibly difficult decision to part ways with 155 employees, which is approximately 10% of our team,” said a spokesperson.
In the internal memo, Houzz’s founders Adi Tatarko and Alon Cohen cite COVID-19’s impact on its core business: pro subscriptions. The subscriptions are for home remodeling and design professionals to find work. Due to COVID-19, many of those same professionals are facing project delays or cancellations as states promote social distancing and shelter in place.
Beyond serving as a marketplace for home renovators and customers, the company also sells furniture from third parties. Many consumers might not be thinking about renovating their bathroom or welcoming construction into their home as the pandemic shows up on doorsteps around the world.
While the layoffs are COVID-19 related, this isn’t the first sign of Houzz struggling as a business. Last month, Houzz fired 10 people and scrapped a plan to create furniture in-house. The move would have seen Houzz bring in-house some of the revenue it usually delegates to third-party manufacturers.
“At Houzz, we continually review our strategic investments, such as Private Label, to ensure that they are aligned to the current needs of our business and optimized for our continued growth,” the company said in a statement to TechCrunch back in March. “As a result of this process, we have made the difficult decision to discontinue our investment in Private Label at this time.”
The company also had some turbulence last year when it disclosed a data breach compromising 57 million records. A year prior, Houzz fired 10% of its staff to cut costs and restructure ahead of preparing for an IPO. And considering a number of factors, we’re guessing that plan to barrel toward the public markets may have changed.
Houzz will provide those laid off with severance packages based on tenure and will pay for benefits until the end of July. The company also said it will help those laid off find their next gig through resume writing, career coaching and network referrals.
Source: Tech Crunch