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Compass is reeling from a horrible year, from financial losses to tech troubles to mass layoffs

Hi, I’m Matt Turner, the editor in chief of business at Insider. Welcome back to Insider Weekly, a roundup of some of our top stories. 

First off, we reported on Friday that Goldman Sachs will cut up to 4,000 jobs. Insider’s finance team has been covering the Wall Street giant’s struggles in its consumer business all year and will be continuing its sharp coverage of Goldman and its rivals. 

You can get the latest on that and much more from our finance newsletter, 10 Things on Wall Street. It’s a snappy weekday read with the biggest stories on the Street, plus the latest on hot-spot restaurants, industry parties, and so much more. Be sure to sign up here.

On the agenda today:

Up first: Senior real-estate correspondent Daniel Geiger is giving us a behind-the-scenes look at the recent turmoil at Compass

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Inside Compass’ horrible year

robert reffkin compassRobert Reffkin, CEO and cofounder of Compass.

Brad Barket/Getty Images for Fast Company

Compass went public with an $8 billion valuation in April 2021, powered by a suite of software tools it said makes its nearly 30,000 brokers more productive. Its revenue topped $6 billion that year, vaulting it well past rivals like Douglas Elliman and Redfin, senior correspondent Daniel Geiger writes. 

This year, the company’s outlook has darkened. 

With home sales dipping amid rising interest rates, Compass has cut workers and bled cash. Its market cap fell to about $1 billion. It slashed revenue projections by about 25%. In June, it laid off about 450 corporate staff, and in October, it let go of about half its 1,500-person tech team.

CEO Robert Reffkin’s once sunny public demeanor has become more somber.

In an internal memo to the company’s leadership team in December, he said underperforming employees should be identified and terminated — and that management would be on hand to help fire subpar workers.

The missive sapped morale. “Everyone I work with has given everything and more to this company,” one manager told Insider. “This message is a real stain on the organization.”

Read the full memo here.

The party animal and the island-hopping hermit

headshots of Sergey Brin and Larry Page facing opposite directions on a neutral background with triangles in the Google colors

Getty; Marianne Ayala/Insider

Since stepping down from Google’s parent company, Alphabet, in 2019, Google cofounders Larry Page and Sergey Brin have taken two diverging paths: Page became a virtual recluse, spending much of the pandemic holed up on his private island in Fiji. Brin, on the other hand, never strayed far from the spotlight, attending flashy events like Burning Man.

At their core, the former partners share a single overriding similarity: Both rely on a tangled web of corporate entities and family offices that serve to minimize their tax obligations, protect them from liability, and shield their wealth from public view. 

See how Page and Brin have used their newfound freedom.

Also read:

The hidden upside of tech layoffs

An animated illustration of a desktop and cursor picking up a tech worker from one desk to another

Tyler Le/Insider

Even as the tech sector has been hammered by mass layoffs this year — more than 140,000 workers have been affected since March, by one count — the vast majority who’ve been let go haven’t remained on the sidelines for long

According to an analysis of laid-off workers conducted by Revelio Labs, a workforce-data provider, 72% have found new jobs within three months. Even more surprising, a little over half of them have landed roles that actually pay more than what they were earning in the jobs they lost. 

Insider’s Aki Ito explains how that’s possible.

Also read:

Activist investing is harder than it looks 

Photo Illustration of Nelson Peltz, Vivek Ramaswamy, Carl Icahn and Christopher Hohn in front of a vintage engraving.

Mike Blake/Reuters; Lisa Lake/Getty Images; Neilson Barnard/Getty Images; Ipsumpix/Corbis via Getty Images; Vicky Leta/Insider

Investors like Carl Icahn wrote the modern playbook on shareholder activism: quietly take large positions in public companies and then agitate for change. 

As stock prices plummet following the pandemic, large companies — like Disney, BlackRock, and Alphabet — are now vulnerable targets to activist investors. But while activists appear to have the wind at their backs, experts like Icahn lay out why it’s not as easy as it seems.

Find out what’s standing in their way. 

A luxury boom is underway

Tourists carrying shopping bags walk through Times Square in New York City.Tourists carrying shopping bags walk through Times Square on August 10, 2021 in New York City.

Alexi Rosenfeld/Getty Images

High rental costs, enrollment in higher-education programs, and delayed marriage are keeping more young adults at home. Nearly half of Americans between the ages of 18 and 29 are living with their parents, a high not seen since the Great Depression era

All that money they’re saving on rent is freeing up more disposable income for discretionary spending, and it’s fueling a surge in luxury spending, analysts found.

Get the full rundown here. 

Also read: 

This week’s quote:

“Naauuuur,” “slay,” and “ick”!

More of this week’s top reads:

Curated by Matt Turner. Edited by Jordan Parker Erb, Hallam Bullock, and Lisa Ryan. Sign up for more Insider newsletters here.

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