Compass CEO Robert Refkin sent an email to employees Thursday morning notifying them of the latest layoffs, marking the third layoff in eight months. .
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Compass is laying off even more staff as real estate agents look to further cut costs in a slowing housing market, according to the report.
Chief Executive Robert Refkin sent an email to staff on Thursday morning announcing the latest layoffs. insider.
The size of the layoffs wasn’t immediately apparent, but it’s the third cut in eight months and will hit $154 million in the third quarter of 2022 as brokerages try to stem losses. , up from $100 million in the previous year. A company spokesperson declined to specify the exact number of employees identified.
Compass went public in April 2021 at an $8 billion valuation and expanded aggressively, averaging 13,314 in Q3 2022.
Its financial outlook for 2022 has deteriorated, but losses have risen and it has failed to turn a profit, with observers and analysts calling the company ‘irreversible’ and ‘the world’s least profitable brokerage’. I was calling. The company’s market capitalization plummeted to about $1 billion amid declining home sales, and the stock plummeted to $2.36 after trading at $20.15 per share on its first day on the market.
Compass has taken many cost-cutting measures to save $320 million. This includes eliminating inventory and financial incentives in recruitment packages. This has fueled its aggressive growth in recent years.
insider Lefkin reportedly told employees in an email that the layoffs would take place “during an economically difficult time.” In fact, the housing market in the past few months has been difficult for brokers as high mortgage rates have dragged down home sales. Sales of existing homes in November were 35.4% below the previous year.
In an SEC filing filed Thursday morning, Compass said it plans to spend $10 million to $12 million on severance payments related to the layoffs. He also said the layoffs would not affect the company’s U.S. engineering team and that technology would continue to be a priority.
Last year, Compass said it had “more than 1,500 experienced product and engineering professionals.” This was before the first round of three layoffs.
In June, the company laid off 450 employees from various corporate divisions, including marketing and other administrative support staff. In October, we let go of about half of our 1,500-person technical team. A brokerage firm’s technology platform is another important part of its agent recruitment pitch.
Email Ben Verde
