Opendoor co-founder Keith Rabois is back with a brutal assessment: the PropTech giant needs to slash 85% of its workforce to survive. Speaking as the company's new chairman following this week's CEO shake-up, Rabois called the 1,400-person team 'bloated' and criticized remote work policies that he says destroyed the company culture.
Opendoor just got a reality check that sent shockwaves through PropTech. Co-founder Keith Rabois doesn't mince words about what went wrong at the company he helped create - and his fix involves cutting 85% of the workforce.
"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," Rabois told CNBC's Squawk on the Street on Friday, just days after being named chairman.
The timing isn't coincidental. Wednesday's appointment of former Shopify executive Kaz Nejatian as CEO came after investor pressure forced out Carrie Wheeler last month. The leadership shuffle also brings back original CEO Eric Wu to the board, completing what looks like a founders' reunion aimed at saving the struggling real estate platform.
Markets initially loved the news - Opendoor shares exploded 78% Thursday before reality set in Friday with a 12% drop. Still, the stock remains up nearly 500% this year, thanks largely to retail investors who rallied behind hedge fund manager Eric Jackson's bullish calls on the company.
But Rabois isn't celebrating the stock surge. He's focused on what he calls a "broken" culture that developed during the company's remote work phase. "These people were working remotely. That doesn't work," he said, emphasizing that Opendoor was "founded on the principle of innovation and working together in person."
The chairman's critique goes deeper than just location preferences. He specifically called out the company's diversity, equity and inclusion initiatives, saying "We're gonna fix all that." It's a stark departure from the tech industry's usual messaging and signals a dramatic cultural shift ahead.
The numbers tell the story of why such drastic measures might be necessary. Opendoor's business model - using technology to buy and flip homes while pocketing the spread - remains fundamentally challenged. The company continues burning cash with razor-thin margins and limited growth prospects, according to CNBC's analysis.
