‘Unicorn’ Loft makes new round of cuts and adds 855 layoffs in the year

The real estate startup Loft, specialized in buying and selling real estate, carried out a 12% cut in the company yesterday, confirmed the company to the Estadão🇧🇷 This is the third round of layoffs for the company, which adds up to almost 855 employees laid off throughout 2022.

312 employees had already been laid off from the old staff of 2,600 people. In April, Loft had cut 159 people in a move it called “credit consolidation.” In July, a new round took 384 other startup employees.

Employees dismissed yesterday will receive a two-month extension to the health plan for the holder and dependents and support in the professional outplacement process (which includes subscription to the LinkedIn Premium service), among other benefits. In the statement, the company “thanks the dedication of the employees who have been terminated” and says that “it is committed to helping in whatever way possible for their replacement in the market”.

select group

Loft is part of the select club of “unicorns”, the name given to startups with a market valuation above US$ 1 billion. Founded in 2019, the Brazilian company was valued at US$2.9 billion in April 2021 after raising US$525 million.

The following month, the startup bought the fintech CredPago, which eliminates the figure of the guarantor in the leasing of real estate, and later acquired the startup CrediHome, specialized in credit. In December 2021, Loft purchased the 123i property listing portal and entered into partnerships with Mirante and Zimmerman. In March 2022, it purchased Vista, which provides management software for real estate agencies.

Loft has been increasing its activities in Brazil. Last week, the company announced the expansion to cities in the interior of São Paulo and Rio Grande do Sul, totaling 28 municipalities in Brazil. For this growth, the company has adopted what it calls expansion “with reduced and efficient cost”, with partnerships with local real estate agencies.

In August, Loft disposed of Nomah, a short-term Brazilian startup acquired in July 2020 and which merged with Mexico and rival Casai. In yesterday’s statement, Loft stated that the cuts are part of an “important stage of the company’s integration with its acquired companies, which results in the restructuring of its operation”.

generalized crisis

Known for hiring hundreds of employees a month, startups have also carried out hundreds of layoffs around the world – and also in Brazil. The period has been dubbed “startup winter”, after the positive wave caused by digitization during the pandemic.

According to experts consulted by Estadão in recent months, the layoffs occur as a route readjustment amid the global rise in prices and the war in Ukraine, which disorganizes the world production chain. In this scenario, investors turn their backs on risky investments, such as startups. As a result, raising rounds has been more difficult than during the pandemic, when investor risk appetite was higher.

Among the national unicorns that have already made mass layoffs in 2022 are Loggi, QuintoAndar, Loft, Facily, Vtex, Ebanx, MadeiraMadeira, Bitcoin Market, Olist, Unico, Hotmart, Dock and Wildlife.