Divvy Stays Mum As Workers Report A New Spherical of Layoffs

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Lease-to-own firm Divvy Houses has undergone one other spherical of layoffs, eliminating a number of positions, in keeping with public LinkedIn posts.

Divvy has but to make a public announcement or reply to Inman’s a number of requests for remark, however at the least seven former staff posted on LinkedIn on Thursday that that they had been laid off from the corporate.

Amongst these affected had been a former vp of communications, an operations challenge coordinator, a software program engineer, a technical recruiter, an IT engineer and an acquisitions lead, in keeping with LinkedIn posts.

“I used to be laid off from Divvy Houses at present, alongside many different proficient and superb colleagues,” former head of communications Cristin Culver wrote on the social media web site. “It was a brief however candy stint at an organization with a mission and crew I’ve lengthy admired.”

Whereas it stays unclear what number of staff had been affected, this marks the third spherical of layoffs the rent-to-own firm has undergone over the previous yr. In February, the corporate instituted a spherical of layoffs that they equally didn’t publicly reveal any particulars about, with information of the layoff coming from affected staff’ LinkedIn posts.

In September of 2022, the agency slashed 12 % of its employees, or 40 individuals, as a response to rising rates of interest.

“Realistically, the macro setting is prone to stay risky and difficult for the foreseeable future. In consequence, we wanted to regulate headcount to replicate the brand new actuality at present,” communications Vice President Kyle Zink stated on the time.

In response to an worker affected by the layoffs, who requested to talk on background, rising charges had been once more cited as the rationale for downsizing. The corporate had initially made strikes to preserve capital when charges first began to rise in 2022, however ad infinitum to the high-rate setting, it’s not possible for them to develop, staff had been informed.

Divvy purchases houses on behalf of its clients after which rents the houses again to them whereas the shoppers proceed to construct fairness on the properties. Initially, the renter contributes 1 % to 2 % of the house worth to the acquisition, then about 25 % of every month-to-month cost that follows goes towards saving up for a down cost.

The settlement between renters and Divvy is organized so {that a} renter can save as much as 10 % of the house’s negotiated buy worth over the course of a three-year lease, however may also purchase the house at any time. Or, if the renter decides in opposition to the house, they will stroll away and obtain money for his or her financial savings, minus a “relisting payment” amounting to 2 % of the house’s preliminary buy worth.

Divvy’s effectiveness at turning renters into owners has been questioned, nevertheless, as has the standard of its rental houses. A Fast Company investigation printed in October of 2022 discovered that the corporate expenses increased rents than conventional landlords in some markets, and has stepped up its evictions of tenants regardless of its said aim of serving to renters turn out to be owners.

A subsequent New York Times investigation discovered that Divvy clients had a far increased month-to-month outlay in contrast with clients of different rent-to-own companies, resulting in struggles for a lot of renters in an period of elevated inflation. It additionally discovered that many purchasers struggled with the corporate’s in-house restore service and sometimes skilled lengthy ready intervals for routine repairs.

 E mail Ben Verde