Compass, the real-estate brokerage startup backed by roughly $1.6 billion in venture funding, 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, according to an internal email seen by TechCrunch.
Citing economic fallout that has seen stock markets plummet 30 percent in just 22 days, Compass chief executive Robert Reffkin wrote 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.
“We aren’t just facing an economic recession, we are facing an economic standstill,” Reffkin wrote. As the country’s unemployment rate soars to a projected 10 percent, Reffkin wrote that the company had no choice but to cut its workforce.
The 15 percent reduction in staffing is being accompanied by an 80% reduction in its concierge business for the moment. As part of the reductions in corporate spending, Reffkin cut his own salary to nothing and reduced the entire executive team’s salary by 25 percent.
For the employees that are laid off, the company said it would provide 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.
The news from Compass is just one indicator of a potential reckoning coming for the booming property tech investment category.
Zillow said it decided to halt its offers to sellers after several states, including California, Illinois, Louisiana, Ohio, New York and Nevada, implemented emergency orders requiring people to stay home and stopping all non-essential business activities, including some real estate-related activities.
Opendoor and Redfin made similar decisions to pause homebuying. Meanwhile other real estate companies are also laying off staff. The co-working startup Convene laid off staff as well, citing current market conditions.
Reffkin is hopeful that the economy will turn around and predicted that the economy could recover in the next 100 days, ending his email saying that he looks forward to a return to normalcy for Compass and the broader market.
“I feel hopeful that China’s apparent success at reducing the spread of the Coronavirus and restarting their enormous economy may provide a blueprint for our future, as well,” Reffkin wrote. “And I feel hopeful because of the ways I see people throughout our company and throughout our society stepping up during this challenging time.”
To date, Compass has 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, according to Crunchbase.
Real estate pause could hit city budget hard – Toronto Sun
With the ongoing coronavirus outbreak hitting the pause button on Toronto real estate sales, there is concern the crisis may deal a serious blow to the city’s bottom line.
Approved earlier this year, Toronto’s $13.6-billion 2020 budget includes an expected $800 million in revenue from the Municipal Land Transfer Tax (MLTT) — accounting for 7% of the city’s operating funding.
The budget already included a $77-million hole expected to be filled by federal funding commitments to pay for the housing of refugees — commitments made long before coronavirus made worldwide headlines and paralyzed economies across the globe.
Relying on MLTT can be a risky venture for cities — in 2018 lower-than-expected real estate numbers produced a $84.5 million hole in the city’s budget, according to briefing notes.
With land sales in the city frozen due to COVID-19, MLTT revenue is expected to fall to levels far below that.
While requests to the city for year-to-date MLTT revenue numbers went unreturned, a statement from the Mayor’s office said the impact of the outbreak on city coffers won’t be known for some time.
“Mayor Tory and City of Toronto staff are working to make sure we do everything possible as a municipal government to help Toronto residents and businesses during the COVID-19 pandemic and after the crisis is over,” read an emailed statement.
“We know there will be an economic and financial impact on the City itself and our finance officials are working right now to understand how big that impact will be over the coming months.”
The TTC alone, said the statement, is losing about $20-million per week in revenue — one of many financial hits the emergency is dealing upon Toronto.
The TTC alone is losing revenue in the amount of roughly $20 million a week and that is just one of the financial hits the City is experiencing as a result of the ongoing emergency.
“Right now, our focus is on stopping the spread of COVID-19 while continuing to deliver essential and critical services and working with the other governments to rebuild the economy as quickly as possible.”
Video: Homeless man hosed down in front of Gastown commercial real estate office – Straight.com
Some Vancouver residents have expressed outrage over social media in connection with how a homeless person was treated in Gastown.
Video on social media shows a person spraying a garden hose to remove the man from the front door of 305 Gore Street.
The real estate office is part of an 11-storey mixed-use condo complex called The Edge, which was developed in 1999 at 289 Alexander Street.
One of those who tweeted about the incident was Harsha Walia, executive director of the B.C. Civil Liberties Association.
She described the use of the hose as “despicable anti-homeless violence”.
(Warning: the video includes swearing.)
It’s increasingly difficult for the homeless to find a place to rest in Vancouver as a result of the closure of libraries and most community centres, as well as the conversion of fast-food outlets and other restaurants to takeout joints.
For more on that, check out the tweets below by homeless resident and Straight contributor Stanley Q. Woodvine.
Real estate publisher lets 70 go, blames coronavirus impact – Toronto Star
Key Media, the Toronto-based publisher of trade magazines Canadian Mortgage Professional and Canadian Real Estate Wealth, has cut more than a third of its global workforce amidst the economic fallout from the COVID-19 pandemic.
This week, the publishing and conference company issued severance notices to 70 people, in offices as widespread as Canada, the U.S., U.K., Singapore and Australia.
Before the wave of cuts, the company employed almost 200 people in eight offices
One employee who received a severance notice said they’d been told by a Key executive that the biggest reason for the cuts was that the company’s conference business had dried up almost all at once, because of the global COVID-19 pandemic.
“The current economic climate has had a huge effect on the company’s revenues, and we have forecast a significant negative impact on the company’s bottom line for 2020. This means that unfortunately, we are no longer able to continue your employment,” the severance notice stated.
Email and Skype messages to company CEO Mike Shipley, who lives in Antigua, weren’t immediately returned.
Key Media publishes 130 trade magazines devoted to real estate, mortgages and insurance. It also runs 70 annual conferences and trade shows.
Earlier this week, Saltwire Media, Atlantic Canada’s largest newspaper chain, laid of 40 per cent of its staff and shut down all of its weekly papers for at least 12 weeks, citing a plunge in advertising in the wake of the COVID-19 pandemic.
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