More Bad News For Compass as it Cuts $10M+ Worth of Jobs

Compass has executed what it says is its third and final round of layoffs as the US portal looks to become profitable for the first time since its inception.

The number of jobs affected has been undisclosed, but The Real Deal reported last week that brokerage Compass will incur circa $10M-$12M costs in severance packages for unlucky employees as the portal looks to become cash-flow positive by mid-2023. The same publication has also said Compass in the market to sublease its 89,000ft New York City headquarters.

The company, founded 2012, laid off 450 employees last June at an estimated cost of $16M, while CEO Robert Reffkin has forecasted a "double-digit" market decline in 2023.

Compass said in an SEC filing:

"The company believes its actions allow for a path to achieve positive free cash flow in 2023 accounting for market scenarios that are worse than Fannie Mae’s negative 22.6% estimate for residential real estate transaction volume (price and units) in 2023."

The filing went on to say that the US technology and engineering teams—the target of previous layoffs—were unaffected this time around.

Compass lost $289 million in H1 2022 and is clearly working hard to reduce its cost base despite projected 2022 revenues of up to $6.5Bn.

The company's share price doesn't paint a pretty picture, dropping by more than 86% in under two years.

Source: Google Finance

Significant job cuts are a worrying trend in the struggling American markets.

Vacasa cut 280 jobs in October in addition to redundancies at Zillow, Realtor.com, Zumper, Redfin. The layoffs continued south of the border, with Mexican portals La Haus and Lamudi also announcing wholesale cuts last year.