Opendoor board chair Rabois says company is 'bloated,' needs to cut 85% of workforce

In a decisive move towards restructuring, Keith Rabois, the co-founder of Opendoor and its recently appointed board chair, has expressed serious concerns about the company's current workforce size. During an appearance on CNBC's "Squawk on the Street," Rabois emphasized that the company's employee count of 1,400 is excessive, asserting that only around 200 staff members are truly necessary for the business to thrive. This shake-up comes on the heels of Opendoor’s recent leadership changes, including the appointment of Kaz Nejatian, a former Shopify executive, as the new CEO. This transition follows the resignation of Carrie Wheeler, which was influenced by pressure from investors. Rabois, now at the helm, has plans to return Eric Wu, the company’s original CEO, to the board to help steer the company through these turbulent times. The announcement of these changes initially resulted in a dramatic 78% surge in Opendoor's stock price, although it later experienced a drop of over 12%. Despite the fluctuations, shares are still up nearly 500% this year, thanks in part to an influx of retail investors spurred by hedge fund manager Eric Jackson's endorsements of the company. Opendoor's business model revolves around leveraging technology to facilitate home buying and selling, yet the company has faced challenges, including significant cash burn and limited growth potential. Rabois acknowledged that a major overhaul of the company’s culture is essential, citing remote work as a detrimental factor. He stated, "The culture was broken," and underscored the need to return to the company's foundational principles of innovation and collaboration in person. Furthermore, Rabois criticized the company's previous focus on diversity, equity, and inclusion initiatives, indicating a desire to refocus the company’s efforts to align more closely with its original mission. He concluded by reiterating the necessity of workforce reductions to stabilize Opendoor's financial health and strategically position the company for future success.