News: With the real estate industry facing headwinds, SoftBank-backed Compass lays off 15% of staff-24-03-2020
Updated On: 24 March 2020
Compass, the real-estate brokerage startup backed by roughly $1.6 billion in venture funding, has laid off 15% of its staff as a result of the shifting economic fortunes created by the global response to the novel coronavirus pandemic, according to an internal email seen by TechCrunch.
Citing economic fallout that has seen stock markets plummet 30 percent in just 22 days, Compass chief executive Robert Reffkin wrote that the company has seen an over 60 percent decline in real estate showings and is modeling a six-month decline in revenue of 50 percent.
“We aren’t just facing an economic recession, we are facing an economic standstill,” Reffkin wrote. As the country’s unemployment rate soars to a projected 10 percent, Reffkin wrote that the company had no choice but to cut its workforce.
The 15 percent reduction in staffing is being accompanied by an 80% reduction in its concierge business for the moment. As part of the reductions in corporate spending, Reffkin cut his own salary to nothing and reduced the entire executive team’s salary by 25 percent.
For the employees that are laid off, the company said it would provide an “enhanced severance and COBRA health insurance” along with letting employees hang on to their company laptops and providing tools, training, and networking help so that they can try to get a new job.
The news from Compass is just one indicator of a potential reckoning coming for the booming property tech investment category.
