Vacasa announces 800 layoffs as hedge fund moves in

PORTLAND, Oregon — Portland-based Vacasa is cutting 13% of its workforce, or 800 roles, as the vacation rental management company works to restructure and reverse several quarters of turbulence.

In an email sent to employees Thursday CEO Rob Greyber called the restructuring “significant” and said it means “we will be parting ways with a lot of talented and hard-working people who have made many meaningful and lasting contributions to Vacasa.”

Vacasa's stock closed down 6.6% Thursday at $6.51.

This is the second round of cuts for the company, which was once one of the region’s fastest growing. In February, Vacasa (Nasdaq: VCSA) announced it would cut 5% of its workforce, or 320 roles.

"This is not easy and I recognize the impact these decisions have on people’s lives and those they care about. We will offer severance and other support to those impacted by today’s announcement. I hope you’ll join me in wishing them well in their future endeavors, and I am very grateful for their efforts and contributions," he said in the email.

Details of the cuts came as part of the company's first quarter earnings. The company is prioritizing local market teams in the field. It is eliminating about 40% of corporate and central operation roles across all functions, the company said in a letter to shareholders. Field positions will be cut by about 6%.

The company is largely remote. In the Portland and Southwest Washington region 47 roles were affected by the restructuring. Prior to this latest news the company had 240 employees in the region. Its Pearl District headquarters in the Heartline building has been subleased with one floor remaining with Vacasa. The other tenants are Swinerton Builders, TimberLab and TrovaTrip.

"We have significant work ahead of us to drive the success of this transformation. It will not be easy and will require precision in execution. However, following the transformation, we believe the business will be much leaner from an expense perspective, and better positioned for the future," Greyber wrote in the shareholder letter.

The company expects $8 million to $9 million in costs associated with the layoff and restructuring that will be reflected in the second and third quarters. Overall the company expects this restructuring will reduce its cost structure by $50 million this year.

DKCM hedge fund takes a large stake of Vacasa

On April 22, New York hedge fund Davidson Kempner Capital Management filed with the Securities and Exchange Commission that through several entities it has taken a 9% stake in the company.

The investor has $37 billion in assets under management. According to SEC filings, two of the investor’s large share purchases were from Mossytree Inc., which is an entity controlled by Vacasa founder and former CEO Eric Breon.

Based on SEC filings, Breon has been actively selling his shares and those of Mossytree for the past year. Breon stepped out of the CEO role in 2020 and left the board in 2023.

In regulatory filings, DKCM outlined that it has been in discussions with Vacasa management, an adviser and “other relevant third parties regarding potential financing transactions.”

Filings indicate that the investor may explore, plan or make proposals around matters including board composition, corporate structure, strategic transactions and other plans.

On April 23, a Vacasa spokesperson said the company had no comment on the new investor or whether the investor was in talks with the company over changes at Vacasa.

CEO Rob Greyber leads Vacasa’s strategic shift

Vacasa markets and manages a portfolio of vacation rental homes. The company grew quickly for years and built its portfolio through acquisitions of other vacation management companies. Under Greyber, the company is shifting this strategy to more organic growth based on individual sales.

In 2023 the company laid out four priorities: improving execution, an organic sales approach, technology development and prioritizing profitability. Earlier this year Greyber told investors that the company will have a bias for decisions that lead to profitability even at the expense of growth.

Greyber told employees that the company is continuing to face challenges with softening demand and an over-supply in short term rentals.

"We believed the headwinds we were experiencing were beginning to ease, and kept a close eye on our targets. As the year has progressed, it has become increasingly apparent this is unlikely to be the case and we are in for another difficult year," he wrote in the email.

Vacasa reports 18% decline in revenue

For the first quarter the company reported revenue of $209 million, down 18% compared to the first quarter last year.

The company widened its losses in the quarter compared to last year. The first quarter of this year saw a net loss of $140.9 million. On an adjusted earnings before interest, taxes, depreciation and amortization basis the loss was $36 million in the first quarter compared to an adjusted loss of $12 million in the first quarter of 2024.

Greyber and CFO Bruce Schuman have been targeting adjusted profitability for the company but noted in the shareholder letter they do not anticipate hitting that goal this year.

The company did not provide any 2024 guidance, citing too many variables in industry dynamics.

In October, Vacasa executed a 1-for-20 reverse stock split to bring its shares back in compliance with Nasdaq listing rules that require a $1 minimum share price.

The Portland Business Journal, a KGW News partner, will be updating the story here.

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