To all the agents in the house,
RE/MAX representatives Thursday announced the company had laid off a staggering 17% of its employees. The company also declared a focus on recruiting larger agent teams, and outsourcing technology.
I found RE/MAX's announcement a bit unusual. The Denver-based company placed the layoff news on page four of six of a news release.
The layoffs directly affected the lives of 120 people, and, tangentially, whoever depended on them. "The size of our technology team has been adjusted," a RE/MAX spokesperson wrote, given that technology jobs will be outsourced to Inside Real Estate.
But Nick Bailey, president and CEO of RE/MAX LLC, put a positive spin on the news.
"We're really excited for this," Bailey told me in a video call. "These strategic investments will help in 2023 and 2024."
One such investment: RE/MAX is scratching its in-house booj platform for real estate agents. RE/MAX acquired booj four years ago, and it is moving to third-party KVCore. Moving away from in-house tech leads to a better resource alignment, Bailey contended, and eventually new positions.
Perhaps most interesting, RE/MAX will cap and cut the fees collected from agents who are part of "agent teams" of six or more.
The plan may goose agent count, but one investor analyst, Tommy McJoynt of Keefe Bruyette Woods, is already warning about reduced revenue.
"While the program is just a pilot and only available to eligible teams, the potential earnings impact of a nearly 50% revenue reduction from those agents is likely to be viewed critically by the market," McJoynt wrote in an investor note fired off Thursday evening.
But Bailey suggests the investment is worth any short-term fee losses. RE/MAX founder Dave Liniger popularized the "team" approach, in which one agent typically takes charge and delegates responsibility to more junior agents.
Bailey called teams a "lifestyle" issue. With a team, you no longer have to work evenings and weekends necessarily, constantly at the beck and call of your clients. "It's truly flexible hours," Bailey said, "And building a small business within your brokerage."
Agents, if you have any answers, or thoughts about what's going on at RE/MAX, please let me know anonymously at mblake@hwmedia.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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