HouseValues closing call center, laying off 100

HouseValues will cut 100 positions companywide and close its Yakima, Wash.-based call center, after second-quarter revenues plunged 28 percent from last year to $16 million and the company posted a loss for the quarter.

HouseValues said it suffered a net loss from continuing operations of $286,000 during the second quarter, compared to net income of $2.5 million during the same quarter last year.

In a Securities and Exchange Commission filing, the online lead generation and lead management company said real estate agents have shown a "reduced propensity to invest in marketing" as sales slowed in many major markets. HouseValues operates HouseValues.com, JustListed.com and HomePages.com

The loss was recorded despite past cost-cutting efforts that slashed expenses for the quarter to $17.1 million, down 16.5 percent from $20.5 million in the second quarter of 2006.

HouseValues co-founder Mark Powell stepped down as chairman of the board in May after the company reported a $1.2 million loss for the quarter. The company's board of directors selected Frank M. "Pete" Higgins, founding partner of Seattle-based Second Avenue Partners, to replace Powell.

Losses from continuing operations for the year to date were $1.45 million, compared with net income of $4.56 million a year ago.

Citing its $74 million in cash, cash equivalents and short-term investments, HouseValues said it considers its "strong balance sheet to be a strategic asset that it intends to deploy opportunistically to enhance shareholder value" by further cost costs to match expected revenue.

HouseValues said it will rack up about $1 million in expenses to downsize, including $400,000 in severance payments to laid-off employees and up to $500,000 to get out of lease obligations that run through 2008. The company had also invested nearly $2 million in the Yakima facility, including improvements to the building and furniture, computers and equipment.

In the long run, HouseValues says the cost-cutting measures will shave $9 million a year from operating expenses.

All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.