For the second time this year, Compass is reducing its workforce.
The first round of layoffs came on June 14, 2022, when Compass let go of 450 full-time employees. These layoffs, along with cost-cutting initiatives, created a lot of controversy in the industry.
Compass filed another 8-K SEC form today, initiating a second round of layoffs for the brokerage.
The filing states, “The Company believes it is in a position to reduce its go forward investment in technology given the maturity of the Company’s technology platform. As a result, a significant portion of the Workforce Reduction involves reductions in headcount on the Company’s product and engineering team.”
Compass Layoffs
Robert Reffkin, Compass founder and CEO, sent an email to the Compass team this morning with the subject line, “Our Path Forward,” which Broke Agent Media obtained.
In the email, Reffkin references the company’s August earnings call, when he shared Compass would be “significantly reducing our operating expenses” and would “undertake headcount reductions by the end of September.”
Regarding layoffs starting September 20, Reffkin stated,
“It’s important to note that we believe that the actions taken today, along with our other non-people related expense reduction efforts, allow us to meet the (goal) we set at our earnings call in August. We know that there has been a lot of anxiety since that earnings announcment and we hope this gives you confidence (moving) forward.”
Those being laid off will have 1:1 departure meetings with department leaders. Like in past layoffs, Compass will provide support for impacted employees, including severance, job placement services, continued health care coverage, paying out unused vacation time, and mental health support.
Employees not impacted by the layoffs are invited to an all-team meeting with Reffkin taking place on September 21, 2022.
The email did not state how many people will be impacted.
Plans for 2023
Reffkin acknowledged how much the company has accomplished, including becoming the number one brokerage by sales volume and earning a spot on the Fortune 500. Compass’s technology platform, he stated, “is the envy of the industry.”
The email also shared some insights for Compass’s plan moving forward, stating,
“Over the rest of 2022, we’ll be focused on making sure we position Compass for an extraordinary 2023.”
Reffkin shared that in 2023, they believe Compass will see a “positive free cash flow despite a downturn” and “continue to beat the industry in growth even after ending incentives for new agents.”
Industry Layoffs
Compass is not alone in layoffs in the real estate industry. Several companies have announced workforce reductions this year, including Realtor.com, Redfin, Anywhere, Keller Williams, and more.
