Kaz Nejatian, technology-driven real estate company Opendoor’s new chief executive officer. This pivot follows Carrie Wheeler, former CEO, stepping down last month amid investor pressure. Nejatian, an ex-Shopify exec, assumes the top job as the company faces enormous challenges. That’s why it’s seen some of the highest volatility in its stock price.
The announcement of Nejatian’s appointment led to a staggering 78% surge in Opendoor’s shares on Thursday. Unfortunately for this rally, in a cruel twist of fate the ever-volatile stock price took a dive of over 12% the very next day. Opendoor’s stock is on fire, up almost 500% YTD. This remarkable rise is fueled by passionate individual investors and recommendations by hedge fund manager Eric Jackson.
Opendoor currently employs 1,400 individuals. But not so fast, said Keith Rabois, the company’s chairman and co-founder, calling the current workforce “bloated.” He said the company will reduce corporate staff down to approximately 200 employees. This shift will be crucial to getting their operational efficiency restored and addressing the ongoing cash burn problems.
“There’s 1,400 employees at Opendoor. I don’t know what most of them do. We don’t need more than 200 of them.” – Keith Rabois
In some ways, the measures are about restoring Rappi’s culture to one of meritocracy and excellence, Rabois said in his announcement of the layoffs. He also blamed parts of Opendoor’s recent struggles on a new remote work world that has stifled working together and innovation. Rabois believes that a streamlined workforce will better position Opendoor to utilize its technology-driven approach to buy and sell homes effectively.
The strategic pivots arrive as Opendoor seeks to position itself ahead of a recalibrating and quickly transforming real estate landscape. The company uses technology to streamline home sales and purchases, but it appears focused on realizing as much upside from increasing prices as possible. With Nejatian at the helm and Rabois overseeing board operations, Opendoor plans to implement significant structural changes aimed at revitalizing its operations.
After our conversation about the tech behind Opendoor, Eric Wu, their co-founder, was back! He’ll return to the board to help accelerate these transformative efforts, as a former CEO. Rabois has very visibly laid out a topline vision and strategic direction to move the company through this transition. This strategy to build confidence among investors is a pathway to success.