Power

Compass lays off 15% as coronavirus wreaks havoc on real estate

The SoftBank-backed unicorn is already predicting a 50% decline in revenue over six months.

Compass real estate sign

New York-based Compass is laying off around 375 employees.

Photo: Smith Collection/Gado via Getty Images

New York-based real estate startup Compass is laying off 15% of its workforce, around 375 employees, as the spread of coronavirus has startups hitting the brakes. The SoftBank-backed real estate company, most recently valued at $6.4 billion, is already predicting its revenue to be cut in half over the next six months, its CEO Robert Reffkin announced on Monday in a company email obtained by Protocol.

"As we continue to hope for the best, we need to prepare for the worst. So we are joining thousands of other companies across the country in making the heartbreaking decision to let some members of our team go," he said.

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Like many startups, Compass is scrambling to reduce its own costs. Not only is it laying workers off, but it's pausing marketing spend and trimming office costs. Reffkin also reduced his salary to $0, and the rest of the leadership team cut theirs by 25%, according to the email.

Real estate in particular has been hit hard amid an economic downturn and orders for people to shelter in place. Startups like SoftBank-backed Opendoor have paused their real estate buying operations at this time to conserve capital, and Zillow and Redfin have since followed suit. Compass, whose agents once preached rising home prices in the Bay Area, has seen demand for showings nosedive. It's also halted programs, like its bridge loans, amid the market turmoil.

"Our own early data is already showing a more-than-60% decrease in showings, and with 'shelter in place' policies likely coming to the majority of markets, we should expect a much larger decrease," Reffkin said in an email to employees.

Still, he took an optimistic tone about the company's future, pointing to being debt-free and having a strong cash position, as well as tech tools to enable remote work and virtual trainings.

"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. And I feel hopeful because of the ways I see people throughout our company and throughout our society stepping up during this challenging time," Reffkin wrote.

Entertainment

Watch 'Stranger Things,' play Neon White and more weekend recs

Don’t know what to do this weekend? We’ve got you covered.

Here are our picks for your long weekend.

Image: Annapurna Interactive; Wizard of the Coast; Netflix

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Nick Statt

Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.

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Jennifer Goforth Gregory
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Fintech

Debt fueled crypto mining’s boom — and now, its bust

Leverage helped mining operations expand as they borrowed against their hardware or the crypto it generated.

Dropping crypto prices have upended the economics of mining.

Photo: Lars Hagberg/AFP via Getty Images

As bitcoin boomed, crypto mining seemed almost like printing money. But in reality, miners have always had to juggle the cost of hardware, electricity and operations against the tokens their work yielded. Often miners held onto their crypto, betting it would appreciate, or borrowed against it to buy more mining rigs. Now all those bills are coming due: The industry has accumulated as much as $4 billion in debt, according to some estimates.

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Policy

How lax social media policies help fuel a prescription drug boom

Prescription drug ads are all over TikTok, Facebook and Instagram. As the potential harms become clear, why haven’t the companies updated their advertising policies?

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Illustration: Overearth/iStock/Getty Images Plus

In the United States, prescription drug advertisements are as commonplace as drive-thru lanes and Pete Davidson relationship updates. We’re told every day — often multiple times a day — to ask our doctor if some new medication is right for us. Saturday Night Live has for decades parodied the breathless parade of side effect warnings tacked onto drug commercials. Here in New York, even our subway swipes are subsidized by advertisements that deliver the good news: We can last longer in bed and keep our hair, if only we turn to the latest VC-backed telehealth service.

The U.S. is almost alone in embracing direct-to-consumer prescription drug advertisements. Nations as disparate as Saudi Arabia, France and China all find common ground in banning such ads. In fact, of all developed nations, only New Zealand joins the U.S. in giving pharmaceutical companies a direct line to consumers.

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Entertainment

Niantic’s future hinges on mapping the metaverse

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Image: Niantic

Pokémon Go sent Niantic to the moon. But now the San Francisco-based augmented reality developer has returned to earth, and it’s been trying to chart its way back to the stars ever since. The company yesterday announced layoffs of about 8% of its workforce (about 85 to 90 people) and canceled four projects, Bloomberg reported, signaling another disappointment for the studio that still generates about $1 billion in revenue per year from Pokémon Go.

Finding its next big hit has been Niantic’s priority for years, and the company has been coming up short. For much of the past year or so, Niantic has turned its attention to the metaverse, with hopes that its location-based mobile games, AR tech and company philosophy around fostering physical connection and outdoor exploration can help it build what it now calls the “real world metaverse.”

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Nick Statt

Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.

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