RealTime IT News

Homestore Will Slash 300 Jobs

The new brass at troubled real estate play Homestore.com, which named a new management team in January after admitting that it overstated earnings, is revamping its organizational structure and will shed about 300 jobs.

The new top management said in a release that the move is aimed at aligning "the company more tightly with its core real estate, builder and rental professional customers."

The company also announced the sale of its eNeighborhoods business unit, although it provided no additional information, including the name of the buyer or the financial terms.

The Westlake Village, Calif.-based company , whose stock is now trading below $1.50 a share, said that the new management team led a review of business units, investments, partnerships and corporate infrastructure spending.

"... we have refocused Homestore on its core business objective -- making real estate professionals more productive and profitable," said the new CEO, Michael Long.

"By disposing of non-strategic businesses, and eliminating unnecessary investments and corporate services, the new Homestore is now centered primarily on improving the usefulness and quality of our real estate products and services. ... We will improve our core products and services and rely on the brands that are already widely recognized by our customers, tying our success more closely to that of our customers."

In early January, Homestore owned up to overstating its earnings for the first three quarters of 2001 by as much as $95 million. The company said it accounted for barter advertising deals as regular ad sales transactions.

Nasdaq halted trading in Homestore stock on Dec. 21, less than a month after its CFO resigned. In mid-January, Homestore said it had terminated or accepted resignations from seven employees, including three who had previously been placed on administrative leave.

The company, long heralded by Wall Street as one of the few survivors of the dot-com shakeout, is now facing a sea of class action shareholder suits.

There was no word from the company on the cost of the job cuts being announced today.

However, as part of the realignment, the company said that Steve Ozonian will lead Realtor.com as president of that group. Pat Whelan has been named group president of the HomeBuilder, Apartments and Rentals and consumer and advertising business units. Allan Merrill has been named executive vice president, business development and Walter Lowry has been named senior vice president, general counsel and secretary.

Homestore's network of Web sites includes the flagship Realtor.com; HomeBuilder.com; Homestore Apartments & Rentals; and Homestore.com, a home information resource.