Vacasa lays off 1,300: ‘We need to reduce our costs’
Vacation rental management company Vacasa laid off 1,300 employees Tuesday, a dramatic step aimed at stabilizing the faltering Portland company. The layoff includes 240 in the Portland area, which puts it among the region’s largest round of job cuts since the early days of the pandemic.
“We need to reduce our costs and continue to focus on becoming a profitable company,” new CEO Rob Greyber wrote in a note to staff Tuesday, which Vacasa then filed with federal securities regulators.
The job cuts represent 17% of Vacasa’s 7,600-person workforce. Greyber said the company had already notified the employees who are losing their jobs.
“The reduced roles spanned both our corporate and field/operations teams, with a focus on maintaining or exceeding our service levels for both owners and guests,” Vacasa said in a written statement.
Until very recently, Vacasa was among Oregon’s most promising young companies. Its annual sales have been growing by more than 50% annually – and increased by an astonishing 81% in 2021. The company markets, manages and maintains vacation rental homes in destinations across the country and splits rental fees with property owners.
The pandemic initially served to boost Vacasa’s revenues, with people choosing to rent vacation properties close to home rather than take far-flung trips. Vacasa held a public stock offering in 2021, a year when sales approached $900 million.
Soon after, though, it became clear that the company wasn’t meeting its growth targets anymore and was facing serious operational problems. Vacasa has been expecting revenue growth around 30% for 2022. it reported a $155 million loss in 2021, the last full year for which it has reported financial results.
Vacasa laid off 280 people in October and, a month later, warned investors of “weakening” sales and cost overruns. Greyber, who joined the company in September, said Vacasa had encountered serious operational problems and cautioned that it would take considerable time to rectify them.
“As a result, we made rapid changes in how we organize, how we work, and where we put our focus, investment, and resources,” Greyber wrote in Tuesday’s note to employees. “Now, having taken more time through our annual planning process, it is clear to me that Vacasa has more work to do.”
Vacasa’s share price closed Tuesday at $1.67 a share, down from $10 at the time it went public in 2021 by merging with a publicly traded investment fund. The company has a market value of about $760 million, down from around $4 billion when it went public 13 months ago.
Oregon’s jobless rate has been steadily climbing in recent months, hitting 4.5% in December. But layoffs had been relatively rare during that period. State economists say many of the people new to the unemployment rolls had recently joined or rejoined the labor force and were still looking for work, or had quit their jobs and hadn’t found new ones.
Vacasa’s laid-off employees will receive severance and access to job-placement services, Greyber said Tuesday. The company said it expects to pay $4 million in severance altogether and $1 million in benefits and related costs for laid-off employees.
Vacasa’s long-term success depends on delivering revenue to property owners, consistent operations, adding homes to its management portfolio and building software to help manage the business.
“I am optimistic about Vacasa’s potential,” Greyber wrote. “Because of that, I am equally focused on improving and accelerating our pace of execution across the company.”
— Mike Rogoway | email@example.com | 503-294-7699
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