In a further sign of the weakening housing market, real estate brokerage firm Compass is cutting more jobs. This follows a 10% reduction in its numbers in June, Bloomberg reports, citing an internal memo by CEO Robert Reffkin.
The biggest layoffs are in the technology team. A company spokesperson would not disclose how many people are being cut.
Compass is taking a pre-tax cash charge of up to $26 million for severance and other benefits in the third quarter, according to a regulatory filing Tuesday.
“Today we reduced the size of some of our non agent-facing teams, focused on areas that do not impact your day-to-day experience,” Reffkin said in the memo.
Compass’ technology team still numbers more than 700, Reffkin said, which is more than all other traditional real estate brokerages combined, he claimed.
In a February filing with the Securities and Exchange Commission, Compass said it had 1,500 people in its technology division.
Over the past 10 years, Compass spent $900 million building its high-tech sales platform and tools, which, executives tell Bloomberg, are built out and no longer need such a large support staff.
Compass has received substantial venture capital financing, including $1 billion from SoftBank Group Corp.—but has never turned a profit, even in 2021 when it sold $251 billion worth of homes, RealTrends data shows.
Compass went public in April 2021, with its shares priced at $18. COMP was trading at $2.62 midday Tuesday.
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