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.