Compass’ nationwide layoffs last month resulted in job losses for 150 workers across 14 office locations in California, according to the state’s employment office.
The layoffs were acute in Compass’ flagship locale of Beverly Hills, where 17 workers got the pink slip. They were also felt across San Francisco, a market the real estate brokerage dominates thanks to multiple acquisitions. Thirty-six workers across Compass’s San Francisco offices were laid off.
The numbers come from a Worker Adjustment Retraining and Notification Act, or WARN, notice employers must file with California’s Employment Development Department when at least 50 workers are laid off.
In all, New York City-headquartered Compass terminated 15 percent of its 2,500-person workforce on March 23. (Agents, who are not considered employees due to their status as independent contractors, were not among the total.)
Fueled by over $1.5 billion in venture-capital funding, Compass has quickly grown into one of the biggest brokerages across the country since its founding in 2012. But Compass has spent heavily to obtain its growth. It has dangled fat signing bonuses and high commissions to lure top agents in key markets, and acquired 14 established brokerages outright over the last two years alone.
CEO Robert Reffkin recently acknowledged that 2020 is shaping up to be the brokerage’s toughest year yet: Compass is forecasting a 50 percent drop in revenue over the next six months, he told agents.
In California, March 27 was the last day of work for laid off employees. Compass, which declined comment for this story, targeted a range of positions.
There were 29 L.A. County layoffs, including six employees classified as agent experience managers, which Compass describes as a go-between for agents and specialist teams including IT and compliance.
Other terminated positions varied. For example, the Santa Monica office laid off two office administrators, but Compass dismissed no other L.A. County office administrators.
Statewide, job titles most vulnerable to layoffs were marketing advisor and transaction coordinator, a position Compass says, “oversees many administrative details freeing agents to focus on building client relationships and advancing their business.”
Under the Gov. Gavin Newsom’s executive order on WARN notices, companies must explain why the coronavirus necessitated layoffs now, instead of in the customary 60 days.
The WARN letter — signed by Sara Peterson, Chief People Officer of Compass — simply states, “Unfortunately, Compass will need to reduce its workforce as a result of a downturn in business due to coronavirus/COVID-19. This was not reasonably foreseeable.”
Compass’s legion of critics doubt whether the layoffs were not reasonably foreseeable.
As of this week, no other California brokerage reported mass layoffs to the state. And other recently filed WARN notices, including from hotels, report layoffs as temporary in the hope business as usual can return when coronavirus lockdown orders are lifted.
Compass, which also laid off 40 workers nationwide in January, reported all layoffs as permanent.
Said one competitor, whose opinion represents the vitriol Compass often gets among L.A. brokers: “Compass is going to use the virus as an excuse for why they might go under.”
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