Redfin Reduces Staff

Joe Weisenthal:

tartups of all stripes have been readying war plans to deal with the down economy. If your focus is on online real estate, that makes it even tougher. Seattle-based Redfin has been something of a phenom for its service that cuts out the realtor middleman, reducing transaction costs for buyers and sellers of homes. Last year it even broke through onto 60 Minutes, in a special on how furious it was making traditional brokers. But alas the party may coming to an end, for now. The company announced that it was laying off 20 percent of its staff, amid a severe slump in activity:

Even a month ago, we were raising 2009 revenue projections. All our markets, now including Chicago, contributed profits.

But the past few weeks have seen a major reversal. As the stock market wiped out prospective down-payments, tours and offers dropped 30%. Transactions that were done came undone. October will still be pretty good, then we're headed for a big dip.

Hence the layoff.

So what's changed?