The Houzz Home Improvement Platform is laying off about 180 people, about 10 percent of its workforce, and one source suggests more layoffs are being prepared as it prepares for its IPO.


Houzz has built a $ 4 billion business on the back of a platform and market that allows you to plan and execute home improvement projects. But as the startup prepares for its next phase of growth, it is also experiencing growth difficulties. TechCrunch has learned and confirmed that the company had laid off about 110 people in the UK and Germany, as well as another 70 people in its US domestic market in the fourth quarter of last year.

"We have restructured our workforce in international markets, primarily in our offices in the UK and Berlin, to double the areas that will have the greatest impact for Houzz," he said. a spokesperson at TechCrunch. "It's always difficult to restructure at stages of growth because of its impact on people's lives. We value and appreciate all our employees and will do everything in our power to build loyalty. We are introducing as many new opportunities as possible in other areas of the business so that people can apply for and move on to other positions. For those who are going to leave Houzz, we offer a separation package and provide all possible help in the search for a new opportunity. Houzz's business is strong and we continue to hire and deploy teams in our international and US offices. "

Houzz has 1,800 employees, which means that these two tranches of layoffs represent about 10% of the company. The spokeswoman added that Houzz had hired T4 in other regions – about 300 people in total – although she did not specify in which department or region.

Houzz does not provide much information on the departments that have been affected by the layoffs nor on what happens next, but details published on social media indicate that at least one international department is eliminated.

"Items bought from you in the UK. For the second time, one of my orders has been canceled. I sent an e-mail to your offices + tried to call only to find that the phone had been disconnected. I've tweeted Yesterday, you received the message that all staff had been fired, "said a customer Twitter.

According to one source, there could be more layoffs, while the company is looking to go black before a possible IPO.

"The company's goal is to reduce costs in order to be profitable before becoming public," the source said.

Starting as an online community for people renovating their homes and looking for inspiration and a place to share their ideas, it has been co-founded by real-life partners, Adi Tatarko (CEO) and Alon Cohen (president), while they were transforming their own ideas. house – Over the years, Houzz has raised more than $ 600 million from a group of illustrious investors including DST Global, GGV, Kleiner Perkins, NEA, Sequoia and more. The goal is to create a much larger and more ambitious market to target a sector – residential renovation – valued at more than $ 1 trillion in North America and Europe.

Today, you can buy furniture, decorative items, bathroom and kitchen furniture, among others, in some 65 categories of products. Professionals and potential customers also use the platform to connect to each other; Millions of consumers and over a million professionals are currently using Houzz.

In recent years, the company has also developed internationally, has made acquisitions and launched new technologies to realize this vision. This included the purchase of IvyMark to develop a broader offering for interior designers, and the creation of a service based on AR processing, among others.

However, all this rapid growth and development seems to present some challenges, as Houzz was trying to move from start-up to a larger, more mature company.

Glassdoor's published Glassdoor reviews from past employees in the last few weeks (see here and here) highlight issues within the company regarding how management communicates with staff, the absence coherent and consistent strategy and other operational challenges that may arise from the creation of a business. a number of different facets over a relatively tight period.

"The company has struggled on several fronts in recent years: writing, community, market, visualization software, paid local marketing," says our source. "All promising projects but requiring years of incubation and ongoing investment."

Houzz never commented on the IPO projects, but last May he hired Richard Wong of LinkedIn as CFO. Some have taken this as a sign of its long-term intention to become public.

Companies as diverse as Amazon, Pinterest and Wayfair all compete with Houzz, and with its latest valuation at $ 4 billion, the question is how Houzz will proceed to its next stage of growth.

Funds raised by venture capital companies and private equity firms have led a number of companies to hold major rounds of financing at an advanced stage, extending the privacy of many start-ups.

On the other hand, a recent series of strong IPOs has also paved the way for more companies to opt for exit from the public market.

These two options, as well as a potential acquisition, could all be options for Houzz. In any case, all of these options could cause the company to re-evaluate its cost base and strategy.

We will update this story as we learn more. For those who are affected by the news, we hope you will fall on your feet.