Vacation rental company Vacasa laid off 1,300 employees on Tuesday, a dramatic move aimed at stabilizing the faltering Portland business. The layoff includes 240 in the Portland area, making it one of the largest rounds of job cuts in the area since the pandemic began.
“We must reduce our costs and remain focused on becoming a profitable company,” new CEO Rob Greyber wrote in a note to employees on Tuesday, which Vacasa then filed with federal securities regulators.
The job cuts will affect 17% of Vacasa’s 7,600 employees. Greyber said the company has already notified employees who are losing their jobs.
“The reduced roles spanned both our corporate and field service/operations teams, with a focus on maintaining or exceeding our levels of service to both owners and guests,” Vacasa said in a written statement.
Until recently, Vacasa was one of Oregon’s most promising young companies. Its annual sales had been growing more than 50% annually — and soared a staggering 81% in 2021. The company markets, manages and maintains vacation rentals in destinations across the country and shares rental fees with owners.
The pandemic initially served to boost Vacasa’s revenue as people chose to rent vacation properties close to home rather than travel far. Vacasa conducted a public stock offering in 2021, a year that saw sales totaling $900 million.
However, it soon became clear that the company was no longer meeting its growth targets and was facing serious operational problems. Vacasa has expected sales growth of around 30% in 2022. For 2021, the most recent full year for which it reported financial results, it reported a loss of $155 million.
Vacasa laid off 280 employees in October and a month later warned investors of “slacking” sales and cost overruns. Greyber, who joined the company in September, said Vacasa had encountered serious operational problems and warned it would take a long time to fix.
“As a result, we have rapidly changed our organization, the way we work, and our focus, investments, and resources,” Greyber wrote in a note to employees Tuesday. “Now that we’ve taken more time into our annual planning process, I realize that Vacasa still has more work to do.”
Vacasa’s stock price closed Tuesday at $1.67 a share, compared to $10 at the time of its 2021 IPO through its merger with a publicly traded investment fund. The company has a market value of about $760 million, up from about $4 billion when it went public 13 months ago.
Oregon’s unemployment rate has risen steadily over the past few months, reaching 4.5% in December. But layoffs had been relatively rare during this period. State economists say that many of the people who were newly added to the unemployment list had recently entered or re-entered the labor force and were still looking for work or had left their job and failed to find a new one.
Vacasa’s laid-off employees will receive severance pay and access to job placement services, Greyber said Tuesday. The company said it expects to pay a total of $4 million in severance payments and $1 million in benefits and related costs for laid-off employees.
Vacasa’s long-term success depends on generating income for property owners, consistent operations, adding homes to the management portfolio, and creating software to support business management.
“I’m optimistic about Vacasa’s potential,” Greyber wrote. “For that reason, I am equally focused on improving and accelerating our pace of execution across the organization.”
– Mike Rogoway | [email protected] | 503-294-7699
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