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.
