UPDATED, Aug. 25, 5:40 p.m.: It’s the clearest sign yet that Compass is becoming what its rivals have always accused it of being: a residential brokerage.
The firm is letting go of Joseph Sirosh, its chief technology officer, The Real Deal has learned. Compass CEO Robert Reffkin announced Sirosh’s departure to the firm’s employees at market close Thursday. The company also said that it would be laying off a “small” number of employees and recruiters in the tech team, though it did not specify how many. The layoffs are part of the firm’s broader $320 million plan to cut costs.
Taking over some of Sirosh’s duties will be Kendra Shimmell, who joined Compass last summer, and Shay Artzi, who joined in January 2021.
“With the successful rollout of the Compass technology platform, Compass now enters its next phase with the largest technology team in our industry, focused on enhancing and building tools that help our over 28,000 agent-entrepreneurs grow their businesses,” the firm said in a statement to TRD. “We are excited to announce that Kendra Shimmell and Shay Artzi will step into the roles of Head of Product and Head of Engineering and we have decided to part ways with CTO Joseph Sirosh, who we thank for his many contributions and wish him well in his future endeavors.”
Notably, Shimmell, who came from Twitch, and Artzi, who came from Amazon, will not be officers of the company, and Compass did not indicate that it would be looking to fill Sirosh’s role.
Sirosh, who joined the brokerage in late 2018, came from Microsoft, where he oversaw its artificial intelligence team. Prior to that, he was at Amazon, where he worked on machine-learning applications.
At Compass, Sirosh’s compensation package in 2020 (the most recent filing available) included a base salary of about $380,000, a $150,000 bonus, and 1.6 million performance-based stock options.
Last week, he sold more than 220,000 shares of Compass Class A stock, or about 40 percent of his total holdings, for close to $870,000. The selloffs were done under an SEC-compliant program that allows insiders to plan trades in advance, and are unrelated to his departure, a spokesperson for the company said.
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Compass has said that it spent $900 million to build out its technology platform, which it believes gives it a significant competitive advantage. It’s now moving to slash spending on tech while emphasizing that it will continue to support agents. During last week’s earnings call, Reffkin credited Sirosh with taking the tech platform “to the next level.”
Layoffs are happening across the board in residential, with firms looking to trim as they grapple with a slower housing market. Redfin has laid off chunks of its workforce, and Inman reported Thursday that Anywhere Real Estate (formerly Realogy) was making an unspecified number of cuts.
Compass’ insistence that it is a technology company – a narrative that helped it win record amounts of venture capital from SoftBank and others – has long been a sore spot for its rivals and critics, who are quick to point out that the bulk of its revenues come from broker commissions — a model identical to that of other brokerages. Compass has been emphasizing that it’s an “end-to-end technology platform” for residential real estate agents.
The brokerage lost nearly $800 million in the 18-month period beginning January 2021. Its CFO, Kristen Ankerbrandt is stepping down Sept. 2, SEC filings show, and the company has yet to name her successor.
Reffkin is serving as interim CFO.