Compass has laid off 15% of its staff, equaling about 375 employees because of money cuts from the COVID-19 pandemic.
Robert Reffkin, CEO of the proptech startup, has issued an email saying the company is preparing for a 6-month revenue plunge of 50%.
Compass CEO Robert Reffkin said the company is expecting a 6-month decline in revenue of 50 percent. It has seen a 60% decrease in home showings, according to the company’s data, as social distancing mandates are enforced around the country and the stock market plunges.
Reffkin wrote in an email to employees:
"We aren’t just facing an economic recession, we are facing an economic standstill. Many parts of our economy will be completely shut down for months. As a result, our country will likely have gone from a healthy level of employment to more than 10% unemployment in a month, faster than any point in our lifetime. This will almost certainly result in a recession. The best we can hope for is a V-shaped recovery as opposed to an extended recession.”
Compass has yet to reveal the number of Seattle-based (its headquartered city) employees cut.
Reffkin recently wrote a letter to Congress, asking it to consider real estate agents as part of any COVID-19 response package.
As of March, Compass had more than 15,000 real estate agents across more than 100 U.S. cities, 400 brokers of which are in the Seattle region across seven offices.
The spread of the virus and the fears that come with this novel pandemic are affecting all aspects of our lives. It is imperative that businesses focus on not only the health of their companies but the health of their employees and the consumers they interact with.
"Over the past week, we have taken steps to reduce costs wherever we can in our business: scaling back Compass Concierge by 80%, shifting all services to virtual delivery, pausing corporate marketing spend, significantly reducing corporate expenses and office costs and halting all non-essential projects. I reduced my own salary to $0 and the executive team has decided to reduce their salary by 25%.
But amidst this global pandemic, we need to make proactive decisions with the level of caution and foresight that this unpredictable period requires. As we continue to hope for the best, we need to prepare for the worst. So we are joining thousands of other companies across the country in making the heartbreaking decision to let some members of our team go."