Compass announced Tuesday that it has conducted another round of layoffs, billing the step as a “significant action” en route to its goal of becoming profitable.
“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,” it said in an SEC filing Tuesday. “As a result, a significant portion of the Workforce Reduction involves reductions in headcount on the Company’s product and engineering team.”
Compass has stated that it has invested $900 million in its tech platform, but the breakdown of those expenditures is unclear, and industry rivals have long questioned the return on that investment.
“As entrepreneurs, you are no strangers to making hard decisions for the long-term success of your businesses,” Compass CEO Robert Reffkin said in an email Tuesday to the firm’s agents, which was viewed by The Real Deal. “I am more excited than ever about what we are building together.”
Compass did not provide specifics on the number of layoffs, but they are likely to be substantial given that they necessitated an SEC filing and that the filing noted costs of between $23 million and $26 million for severance and termination benefits. When the company laid off 450 employees in June, it incurred severance and termination-related costs of between $15 million and $16 million. Given that, it’s likely the layoffs this time around were larger, though the company declined to comment beyond the filing.
The company plans to cut its expenses by $320 million this year.
Reffkin continues to employ a “nothing to see here” approach. He said in the agent email that he and president Neda Navab would host a “fireside chat” Wednesday to “talk about why we are so confident in the company we are building, how we are navigating through this moment in the market while maintaining a strong financial position, and how we are going on the offense to dispel the narratives that have been circulating about Compass.”
Compass’ losses in 2021 and the first half of this year totaled nearly $800 million, according to its financial statements. Its stock price hit an all-time low of $2.50 shortly after the opening bell Tuesday and was trading down about 4.7 percent as of late morning.
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Harrison Connery contributed reporting.