Khosla Ventures’ Keith Rabois is back as chairman at Opendoor, and he doesn’t understand why the company’s workforce has gotten so “bloated.”
Rabois, who cofounded the online residential real estate marketplace a decade ago, rejoined the board earlier this month along with his cofounder Eric Wu and promised to bring back “founder DNA” to a lackluster Opendoor.
Part of Rabois’ revival plan includes taking a closer look at the company’s workforce, which has gotten too large, Rabois told CNBC.
“There’s 1,400 employees at Opendoor. I don’t know what most of them do. We don’t need more than 200 of them,” Rabois said.
Founded in 2014, Opendoor helps people buy and sell their homes online and eliminates the need for a real estate agent by combining the buying, selling, and closing process into one platform. After years of success and then hitting an all-time-high of $15.6 billion in revenue in 2022, the company has reported falling numbers every year since. Opendoor reported revenue of $5.2 billion last year, down about two-thirds from its highs in 2022.
Apart from cutting workers, Rabois said he wants to revive Opendoor’s culture by having employees work in the office.
“The culture was broken,” Rabois said. “These people were working remotely. That doesn’t work. This company was founded on the principle of innovation and working together in person. We’re going to return to our roots.”
Rabois is the latest tech leader turning to layoffs as a way to boost profitability and efficiency. Meta’s Mark Zuckerberg declared 2023 the company’s “year of efficiency” and proceeded to cut headcount and flatten leadership structures. Since then, Google CEO Sundar Pichai, Microsoft CEO Satya Nadella, and Salesforce CEO Marc Benioff have all overseen thousands of layoffs as they also look to AI to fill in the gaps.
In Opendoor’s case, cutting back on the company’s “bloated G&A” (general and administrative expenses) will ensure company costs won’t serve as a headwind as it goes through its normal boom and bust cycles, Rabois said in an interview on the Sourcery podcast published Monday. Shopify’s former chief operating officer, Kaz Nejatian will also help right the ship as new CEO, Rabois said, as well as a fresh $40 million capital raise by his cofounder Wu and VC firm Khosla Ventures.
Rabois said he has a multi-step playbook to bring back the struggling company, whose share price plummeted below $1 for most of 2024 and 2025. After the company announced the executive changes and Rabois’ return last week, the company’s stock skyrocketed by 80%. Shares of Opendoor were trading down 3.5% at $9.14 as of early morning trading Tuesday.
Rabois has decades of experience in the technology industry. He made his name in tech as part of the “PayPal Mafia” alongside Peter Thiel and Elon Musk. Rabois also served as an early executive at both LinkedIn and payments company Block, formerly Square.
As an investor at both Khosla Ventures and Founders Fund, he has also led investments in companies such as DoorDash and Ramp. Rabois is now managing director at investor Vinod Khosla’s venture capital firm, which manages about $16 billion in assets under management.