Real-estate brokerage startup, Compass has reportedly laid off 15% of its workforce due to the ongoing crisis in the real estate industry because of the coronavirus outbreak.
As per a TechCrunch report, based on an internal email accessed by the media, the Softbank-backed startup has recently has laid off 15% of its staff as a result of the shifting economic fortunes created by the global response to the novel coronavirus pandemic,
Company Chief Executive Officer Robert Reffkin cited economic fallout for the decision. He also wrote in the mail that the company has seen an over 60 percent decline in real estate showings and is modeling a six-month decline in revenue of 50 percent.
As the unemployment rate in the United States increases to a 10% projection, Reffkin said that the company had no choice but to cut down the headcount. “We aren’t just facing an economic recession, we are facing an economic standstill,” said the CEO in the email.
Apart from job cuts, Compass will also witness an 80% reduction in its concierge business for the moment. Reffkin himself will be reducing his salary down to “nothing” and the entire executive team will also get a 25% reduction in the salaries.
Assisting the laid-off employees, the company said it would provide them with an “enhanced severance and COBRA health insurance” along with letting employees hang on to their company laptops and providing tools, training, and networking help so that they can try to get a new job.
According to Crunchbase, Compass has so far raised $1.6 billion in financing from investors including the Canadian Pension Plan Investment Board, Fidelity, Wellington Management, Softbank Vision Fund, and the Qatar Investment Authority.
The recent job cuts at Compass only point to the upcoming crisis businesses will face post the containment of the coronavirus.
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