Compass plans more layoffs by the end of September, according to an email from CEO Robert Reffkin obtained by The Real Deal.
The layoffs will affect roles that “do not impact agents,” a spokesperson for the residential brokerage said. In the email sent to employees ahead of Monday’s earnings call, Reffkin said the affected jobs will be “focused on roles outside of the regional operations team.”
The residential brokerage lost $101 million in the second quarter and nearly $300 million in the first half of the year.
The spokesperson declined to comment on how many employees will lose their jobs, but said it will be one set of cuts. The majority of the layoffs will occur before October, according to Reffkin’s letter.
“I recognize this gap in timing will cause anxiety for many of you, and for that I am sorry,” Reffkin wrote, adding that Compass plans a team meeting at the end of September to discuss the “path forward together.”
Compass also sought to avoid affecting broker support in June, when the company announced it was laying off 10 percent of its staff, or about 450 employees that did “not directly support agents,” Reffkin said in a letter at the time.
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Compass is now worth less than it raised from investors
In his most recent letter to employees, Reffkin blamed rising interest rates for a hit on Compass’ bottom line. Home sales across the country have slowed down this year. In its latest earnings report, Compass projected full-year revenues for 2022 between $6.15 billion and $6.45 billion, well below earlier guidance of between $7.6 billion and $8 billion.
“We are now preparing for the real estate market this calendar year to be nearly 25% below where industry experts believed it would be just 6 months ago,” he wrote. “Never in my time at Compass have we seen such a big downturn in the market in such a short period of time.”
Compass isn’t the only real estate company feeling the pain of a slowing market, which has spurred cuts across brokerages and proptech firms. Redfin laid off 470 employees, or 8 percent of its staff, in June. Side, a brokerage startup that achieved unicorn status last year, announced that month it was laying off 10 percent of its workforce, or 44 employees.
The mortgage industry has also been hit hard. More than 4,000 employees across at least 10 companies have been laid off since the beginning of the year, including at major institutions like JPMorgan Chase and Wells Fargo.