Real estate valuation technology company Clear Capital has conducted a new round of layoffs as part of a company restructuring plan. The firm announced on Wednesday that it was eliminating about 24% of its workforce, or over 250 jobs, as it “folds up” departments and consolidates teams amid a tough housing market.
Per the firm, this round of layoffs will include cuts to some leadership and managerial roles.
“We are consolidating different teams, so there’ll be some leadership roles eliminated because of redundancy,” Clear Capital CEO Duane Andrews said in an interview with HousingWire. “Folding up departments makes sense when volumes are so low that you can’t sustain as many managerial positions at that point. So, we did that in a way that really makes sense for our business.”
Employees were notified on Wednesday morning about the workforce reductions. Those who were affected by the layoffs will receive severance packages and outplacement services to help with the transition, Clear Capital said.
This is the second round of layoffs conducted by Clear Capital in recent months. The firm reduced its workforce by about 27%, or about 350 positions, in October following a slowdown in the housing market.
According to Andrews, the goal of restructuring is to help the company weather the current industry headwinds and prepare for where the market will be over the longer term.
“This reduction in force is really a restructuring of our company as opposed to a right-sizing of the company — a fundamental restructuring of our company to meet the market where it is today, and to be where it’s going to be in the future, Andrews said.
Following this round of workforce reductions, Clear Capital’s total employee headcount will be about 800, according to the firm. The firm had about 1,400 employees at the end of 2021.
“We looked at this as not just an adjustment to the current market climate, but also looking at the current shift that’s happening in the valuation industry. We’ve been a company that’s been investing very heavily in bringing data analytics and technology into the valuation space. We’ve been very involved in appraisal modernization [and] investment over the past five years,” Kenon Chen, EVP of corporate strategy at Clear Capital, said.
“We’re using this as an opportunity to restructure our company in a way that we think will allow these programs to be adopted and be successful moving forward.”
Chen said that the company took a holistic approach to the restructuring, and that in addition to the layoffs, the executive team will take a 10% pay cut at minimum.
“We don’t take for granted the impact that this has on people, the impact to their families and to their careers. We don’t take any of those things lightly,” Chen said. “This decision is being made with that in mind, but knowing that, it’s the right thing to do — not only for the health of the company moving forward, but also for the sake of our customers and those that we want to continue to serve , [to] continue to help move forward in the industry.”
The firm said the goal is to navigate the layoffs with “continued empathy.”
“We think this will put us in a very comfortable position to continue to reinvest in our technology and solutions for the foreseeable future. Of course, we’ll always have to continue to navigate market changes as it happens, but we feel confident that this structure is going to give us the operating approach we need to be very resilient, even if the market declines further,” Chen said .
The firm, one of the largest appraisal management companies in America, cited similar reasons for the layoffs that occurred late last year. At the time, Andrews said the company was restructuring all divisions to reduce expenses and support the future strategy — which would allow the company to refocus the business on key areas and ensure they were on track for sustainable growth.
In July 2022, Clear Capital rolled out two application programming interfaces (APIs) — a property valuation API and risk assessment API — to make adopting and deploying modern valuation solutions easier, leading to faster loan closings. The desktop appraisal solutions were developed to meet new desktop appraisal guidelines introduced in April 2022.
In January 2022, the firm launched ClearPhoto, a photo review system that automates collateral underwriting in compliance with government-sponsored enterprise guidelines and internal credit policies. The tool utilizes computer vision technology to highlight the correct files automatically — which allows underwriters to make more efficient and informed decisions, the company said.
The Reno, Nevada-headquartered company was established in 2001 and claims that with its desktop appraisal solutions, desktop appraisals can be completed as much as 50% faster compared to traditional appraisals.