The real estate company Compass is undergoing layoffs Tuesday as part of its plan to “significantly” reduce costs by the end of the year in order to navigate simultaneous downturns in the housing and tech sectors. The layoffs will concentrate on the company’s technology team, according to a company spokesperson who confirmed the layoffs to Motherboard.
“These reductions are difficult, but ultimately necessary to ensure we can confidently navigate the current market,” CEO Robert Reffkin wrote in an email announcing the layoffs on Tuesday.
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The company stated last month during its earnings announcement that it intended to drastically cut costs over the second of the year as part of a commitment to become cash flow positive by 2033. In his email Tuesday, Reffkin acknowledged that announcement had caused “a lot of anxiety” amongst the company’s staff, but said that he hopes Tuesday’s cuts and the company’s broader plan to cut costs gives those who remain the “confidence about the path forward.”
The housing company did not disclose the size of the layoffs, and Reffkin only said in his email that they would not affect regional operations employees.
Compass has long pitched itself to investors as a tech-savvy alternative to traditional real estate brokerage, a main reason why the compass was able to land more than $1 billion in private investment before going public last year.
Tuesday’s sizable cuts to the tech team—a senior director said “65 percent” of the cuts would come from the tech side, according to one Compass employee—will seem to some to be an admission that the company is less of a tech company that it once portrayed itself as.
But company leadership believes that Compass’ tech team does not need as many employees now that the platform has been developed, according to a company spokesperson, who added that the tech team would still have over 700 people after the layoffs.
Some of the company’s own employees aren’t so sure about that line of argument, telling Motherboard that they believe the platform remains flawed and incomplete.
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The post Real Estate Giant Compass to Lay Off Significant Number of Tech Employees appeared first on VICE.