From left: Compass Kendra Schimmel, Shay Artzi, Robert Ruffkin and now-former CTO Joseph Sirosh (photo illustration by Steven Dilakian from Getty Images, LinkedIn/Shay Artzi)
Updated, August 25, 5:40 p.m.: It’s the clearest sign yet that Compass is becoming the housing broker its rivals have always accused it of being.
The company is releasing its chief technology officer, Joseph Sirosh. The real deal Learned. Compass CEO Robert Refkin announced Sirosh’s departure to company employees late Thursday. The company said it would lay off a “small” number of employees and recruiters in its tech group, though it didn’t say how many. The layoffs are part of the company’s broader $320 million cost-cutting plan.
Taking over some of Sirosh’s duties are Kendra Schmelz, who joined Compass last summer, and Shay Artzi, who joined in January 2021.
“With the successful launch of the Compass technology platform, Compass now enters its next phase with a larger technology team focused on improving and building tools that help more than 28,000 agent-entrepreneurs grow their businesses,” he said. Statement b TRD. “We are excited to announce that Kendra Schimmel and Shay Artizzi will be stepping up to lead product and engineering roles and have decided to part ways with CTO Joseph Sirosh. We thank him for his many contributions and wish him the best of luck in his future endeavors.”
Notably, Twitch’s Schmelz and Amazon’s Artizi won’t be executives at the company, and Compass hasn’t indicated it’s looking to fill Sirosh’s role.
In the year Sirosh, who joined the brokerage in late 2018, came over from Microsoft to oversee its artificial intelligence team. Before that he was at Amazon where he worked on machine learning applications.
At Compass, Sirosh’s 2020 compensation package (most recently provided) included a base salary of about $380,000, a $150,000 bonus and 1.6 million performance-based stock options.
Last week, he sold more than 220,000 Compass Class A shares, or 40 percent of his total holdings, for $870,000. The sale was made through an SEC-compliant program that allows insiders to plan trades in advance and had nothing to do with its exit, a company spokeswoman said.
Compass said it spent $900 million to build its technology platform, which it believes will give it a significant competitive advantage. It is now moving to reduce spending on tech, stressing that it will continue to support agents. During last week’s earnings call, Refkin credited Sirosh with taking the technology platform “to the next level.”
Layoffs in housing are happening across the board, with companies looking to cut back as they battle a sluggish housing market. Redfin has cut parts of its workforce, and Inman reported Thursday that Anywhere Real Estate (formerly Relogy) is making an undisclosed number of layoffs.
Compass’s insistence that it is a technology company — a narrative that has helped it win significant investment capital from SoftBank and others — has drawn competition from its rivals and critics, who have often been quick to point to its size. From broker commissions – the same model as other brokers. Compass has been emphasizing that it is an “end-to-end technology platform” for residential real estate agents.
In the 18 months to January 2021, the brokerage lost nearly $800 million. Its CFO, Kristen Ankerbrandt, will leave Sept. 2, SEC filings show, and the company has not named her successor.
Refkin is serving as interim CFO.
