New York-based real estate brokerage Compass has laid off 84 employees based in Washington state as part of a reduction that largely targets the company’s technology workforce.
In a filing with the U.S. Securities and Exchange Commission on Tuesday, Compass said a significant portion of its cuts in headcount would come from the company’s product and engineering team.
A Worker Adjustment and Retraining Notification from the Washington state Employment Security Department on Wednesday put the number at 271 workers, with 84 “local” and 187 “virtual.” A Compass spokesperson said “virtual” employees were remote or spread across the country, but have to be assigned a location, so the Compass system considers them Washington employees.
Amid a cooling U.S. housing market driven by increased mortgage rates, Compass previously stated in an Aug. 15 earnings call that it would be cutting costs in order to achieve profitability in 2023. Seattle-based Redfin also made cuts this summer, laying off 8% of its workforce to address to the housing downturn.
In an email to Compass agents on Tuesday, founder and CEO Robert Reffkin said the company was fortunate to be able to reduce costs while still investing more than any other company in the real estate industry.
“For example, the biggest reduction came from the technology team, however, our technology team is still over 700 people strong and likely larger than every traditional brokerage company’s tech team combined,” Reffkin wrote.
Founded in 2012, heavily funded Compass made a splash in 2019 when it cut the ribbon on a West Coast engineering hub in Seattle, right in Amazon’s backyard.
Reffkin said at the time that big companies like Amazon, Microsoft and the engineering hubs of Facebook and Google that are set up in Seattle drew Compass to the city.
“A lot of big companies have enough people that want to be part of transforming a new industry,” Reffkin said.
In March 2020, Compass laid off about 375 employees due to the onset of the COVID-19 pandemic. Seven months later, Compass acquired Modus, a Seattle startup that automated the title and escrow phase of closing on a home.
After raising more than $1.5 billion from investors, Compass raised another $450 million when it went public in April 2021. The company posted a loss of $494 million that year.
This past June, it shut down Modus, as it began its cost-cutting moves. The company laid off 450 workers, or 10% of its total workforce.