It’s becoming clearer everyday that Compass is becoming what many Boston condo agents have always accused it of being: Just another residential brokerage firm. Remember, when Compass first made its debut on how it was going to revolutionize the real estate market with their technology experts? Let’s fast forward to 2022, and see how their technology idea is working out.
Compass is laying-off of Joseph Sirosh, its chief technology officer, The Real Deal has reported. Compass CEO Robert Reffkin announced Sirosh’s departure to the firm’s employees at market close yesterday.
The company also said that it would be laying off a “small” number of employees and recruiters in the tech team, though it did not specify how many. The layoffs are part of the firm’s broader $320 million plan to cut costs.
Compass has said that it spent $900 million to build out its technology platform, which it believes gives it a significant competitive advantage over other real estate companies. It’s now moving to slash spending on tech, I guess that idea didn’t work out as plan.
Joseph Sirosh, joined the brokerage in late 2018, came from Microsoft, where he oversaw its artificial intelligence team. Prior to that, he was at Amazon, where he worked on machine-learning applications.
At Compass, Sirosh’s compensation package in 2020 (the most recent filing available) included a base salary of about $380,000, a $150,000 bonus, and 1.6 million in performance-based stock options.
Last week, Joseph Sirosh sold more than 220 of Compass Class A stock, or about 40 percent of his total holdings, for close to $870,000. The selloffs were done under an SEC-compliant program that allows insiders to plan trades in advance. I think that was a good move.
Compass’ insistence that it is a technology company – a narrative that helped it win record amounts of venture capital from SoftBank and others – has long been a sore spot for its rivals and critics, who are quick to point out that the bulk of its revenues come from broker commissions — a model identical to that of other brokerages. Compass has been emphasizing that it’s an “end-to-end technology platform” for residential real estate agents.
Compass lost nearly $800 million in the 18-month period beginning January 2021. It also cut bonus to real estate agents. Its CFO, Kristen Ankerbrandt is stepping down Sept. 2, SEC filings show, and the company has yet to name her successor.
I think that Compass over promised and under delivered on their technology prowess. the future of Compass is in flux, on the positive side they do have top notch Boston real estate agents and brokers, not just in Boston but throughout their company.
on the negative side, most if not all are in two year contracts. Once these contracts expire I foresee these agents fleeing the ship if the stock continues to sink.
I also believe Compass maybe primed for a take-over. I wouldn’t be surprise is Realogy makes it part of their stable of real estate companies with Coldwell Banker, Sotheby’s ect…
As far as Ford Realty Inc is concerned, our intension is to remain as an independent real estate brokerage and we are excited to compete with our technology with the bigger players like Compass.
Read more on the Compass troubles