Despite the implications of the generally resilient U.S. labor market, real estate specialist Opendoor Technologies (US:OPEN) – an enterprise that deploys artificial intelligence to help flip homes – continues to struggle. On Tuesday, Reuters reported that the company announced it will cut roughly 560 jobs or 22% of its workforce, citing a declining housing market.

The unfortunate announcement follows a previous round of layoffs that occurred in November. Back then, the San Francisco-based enterprise reduced headcount by 550 jobs or approximately 18% of its workforce at the time.

In an email, Opendoor stated that “[w]e're taking these actions now to better align our operational costs with the anticipated near-term market opportunity.”

Initially, OPEN stock generated intense interest because the underlying company deployed AI and other innovations to process the busy work associated with real estate transactions. For home sellers, the benefit centered on a quicker, more predictable sale. Naturally, for Opendoor, it benefitted from offering a lower purchase price in exchange for the aforementioned conveniences.

This so-called iBuyer business model – leveraging AI to buy and later list homes for profit – worked beautifully during the post-pandemic homebuying rage of 2020 and 2021. However, as the Federal Reserve began aggressively raising benchmark interest rates to combat skyrocketing inflation, iBuyers stumbled badly.

Since the beginning of this year, OPEN stock gained 44%. However, in the trailing one-year period, shares gave up 81.5% of equity value, reflecting severe fundamental fissures.

Not surprisingly, bearish traders have been eyeballing OPEN stock for cynical reasons. According to data from Fintel, OPEN’s short interest hit 12.15% of its float. Also, its off-exchange short volume ratio pings at 60.73%.

In addition, based on Opendoor’s stock options flow, the predominant implications behind the activity in the derivatives market posted this month are bearish. Interestingly, though, OPEN’s current put/call ratio sits at 0.39. Generally, put/call ratios less than 1 indicate bullish sentiment.

Nevertheless, steep challenges remain for OPEN stock. According to Reuters, at the end of last year, “Opendoor had nearly 13,000 unsold homes, out of about 35,000 homes purchased in 2022. By comparison it bought just under 37,000 homes in 2021.”

Ominously, a recent Barron’s article pointed out that the spring season – typically a busy one for the housing market – slowed more than usual. Essentially, higher mortgage rates squeezed out would-be buyers. Compounding matters, prospective sellers who locked in mortgage rates at historic lows refused to sell. Thus, the impasse imposes a double whammy on OPEN stock.