According to news reports, Compass has laid off a large portion of its technology team, which seems to suggest that hundreds of jobs are being cut. This is the second round of layoffs this year.
Three months after laying off 10% of its workforce to prepare for worsening market headwinds, New York City-based brokerage Compass announced Tuesday another round of layoffs focused on its technology division.
Bloomberg made the news Tuesday morning after obtaining an internal memo from CEO Robert Refkin to Compass employees and agents. Refkin said the layoffs were part of the brokerage’s cost-cutting strategy and pledged not to affect the brokerage’s technical services.
“Today we’re downsizing some of our non-agency teams to focus on areas that don’t impact your day-to-day experience,” Refkin said in the memo.
A Compass spokesman declined to say exactly how many people were fired or what severance packages they would receive. However, Bloomberg’s in-depth investigation into the company’s latest regulatory filing with the U.S. Securities and Exchange Commission (SEC) sheds light on the scale of the layoffs.
In the filing, Compass estimated it would require pretax charges of $230 million to $26 million to cover severance packages for employees laid off in the third quarter of this year. Bloomberg estimates there are 700 people left on the brokerage’s tech team — half the 1,500 Reffkins touted at last November’s Compass annual all-hands conference in Austin.
The news outlet did not identify the number of layoffs, but the suggestion appeared to be that hundreds of employees in the technology sector were laid off.
Compass’ technical team has undergone several major shifts over the past three weeks, with CTO Joseph Sirosh leaving the company on August 2. 25.
The former Amazon and Microsoft executive is credited with leading Compass to create the ultimate end-to-end platform for its agencies and their customers. However, the brokerage noted that it is time to “go to the next stage.”
“With the successful launch of the Compass technology platform, Compass is now entering its next phase with the largest technology team in our industry, focused on enhancing and building tools to help our 28,000+ agency entrepreneurs grow their businesses,” said Inman in a previous statement. The article pointed out.
When Inman called for comment on Tuesday, a Compass spokesman declined to name some of those fired. They did, however, provide a written statement reaffirming the strength of Compass’ technology division.
“I want to make clear the strength of our current technology leadership. Our CTO has been replaced by Shay Artzi as Head of Engineering,” the statement read. “Shay has 25 years of technical experience, 14 patents, holds a Ph.D. From MIT, worked at Amazon and IBM, and was previously CTO.”
“He reports to our COO Greg Hart, who previously reported directly to Jeff Bezos [and] Before he launched Amazon Alexa, he ran Amazon Prime Video with a technical team of 2,000 people and reported to him,” it added.
Last week, Hart revealed part of his Compass blueprint, which focuses on addressing the company’s longstanding spending problems — a move that keeps them out of reach even with billions of dollars in funding from venture capital funds profit.
“[Our earnings results are] That’s the context for us to make sure we’re taking the right steps as a company on our path to profitability,” he said. “So make sure we’re really paying close attention to all costs and simplifying our operations to be more efficient. “
“I firmly believe that in a downturn, the strongest companies have the best chance of surviving,” he added. “I think our platform is a huge asset for Compass because it helps us be more proactive, it attracts agents to Compass, and it helps agents stay at Compass.”