Digital mortgage lender Tomo is the latest real estate company to slow expansion efforts and turn to staff layoffs.
The company announced earlier this week that it laid off 44 employees—roughly a third of its team. CEO and co-founder Greg Schwartz shared via LinkedIn that the company took such strong measures to ensure Tomo has enough of a runway for the business to succeed in its mission, noting the rapid rise in interest rates has had an effect on business.
“While we explicitly don’t offer refinance mortgages because of the risky boom and bust cycle, we’ve still been impacted by the rapid rise in interest rates that has reduced purchase mortgage margins,” Schwartz wrote. “Venture capital is also pulling back in this chaotic economic environment, and thus, we must map out a stable budget that will rely on less capital for longer.”
To achieve longterm stability, Schwartz also noted that Tomo is “dialing back” market expansion plans and will focus on building tech-enabled mortgage experiences that deliver faster, less costly and less stressful experiences for homebuyers.