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Online real estate service Redfin Corp. slashed its staff by 20 percent yesterday in order to stay afloat during the economic downturn — despite strong revenue and $21 million in VC backing from Draper Fisher Jurvetson, Madrona Venture Group, Vulcan Capital, BEV Capital and the Hillman Co.
The Seattle-based firm, which helps buyers find homes for sale and broker deals, was hit hard by the credit crunch in recent weeks. In addition to a 30 percent drop in the number of people touring homes and making offers, a lot of prospective buyers lost their down payments and had to let deals fall through. Unlike rivals Trulia and Zillow, the site only generates revenue from the real estate transactions it facilitates.
Redfin CEO Glenn Kelman made the call to cut the staff back to 75 employees, saying it will help the company avoid more layoffs down the line. He has experience in this area as cofounder of former corporate portal provider Plumtree Software, which survived the dot-com bust and eventually went public.
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