To all the agents in the house,
It's not the end of the world, but Side pink slipping about 40 people could mark the beginning of the end of the COVID-19 real estate boom.
Side, a five-year-old, San Francisco-based brokerage that normally draws publicity from raising venture capital money or expanding into new markets, laid off about 10% of its total workforce, the company said this week.
Side would not disclose the size of its workforce. I have heard that the number of employees ballooned up to 400 as the company recently entered markets including Seattle and New York City.
"Unfortunately, we did have to part ways with a small number of inSiders (around 10%) in order to set up the company for long-term success," Guy Gal, the CEO and co-founder of Side explained in a written statement, adding that, "One of the main reasons we scaled back was to keep ourselves focused on our number one priority: Providing our existing agent partners with the brokerage services possible."
Side is now, "Taking the time to slow down, assess the changing market, and concentrate on creating tools that save our partners time and grow their businesses," Gal wrote.
I've mentioned this a zillion times. But it's important to keep saying why Side and other brokerages were accelerating in the first place. Whatever frustration buyer's and buyer's agents had with low inventory and high demand, 2021 was a great, historically great, year to be in brokerage. Price appreciation and total sales were at their highest levels since 2006.
Today, existing and new home sales are dropping. And higher interest rates make it more difficult for many homebuyers to afford a mortgage.
It's somewhat easier to spot companies scaling back in mortgage. Processors, underwriters, and support staff can be subject to mass layoffs. And if the lender is in major trouble, loan officers, who are usually employees, can be pink slipped as well. But agents, except for Redfin and the recently decimated REX Homes, are not employees. If an agent's sales portfolio falls in a forest, it does not make a sound in Worker, Adjustment, and Retraining Act, or WARN, layoff notifications.
Perhaps, though, other brokerages will also lay off support staff, or scale back other operational costs (for example: concierge services).
Agents, is cost cutting and even layoffs at your brokerage a concern for you? Or do you see more stability at your current brokerage than a company like Side that was growing fast?
Please email me anonymously at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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