In a move designed to maximize the potential to achieve positive cash flow in the near term, Zip Realty announced office closings of less productive offices. In this press release, the CEO of Zip Realty stated the following:
“We believe that the changes we are implementing today position ZipRealty for improved near-term financial performance and stronger long-term growth,” said Lanny Baker, the Company’s Chief Executive Officer. “Performance in our strongest markets demonstrates that when ZipRealty’s advantages in technology and online marketing are aligned with all-star real estate agents and outstanding local leadership the results can be compelling – for consumers, agents and stockholders alike…The pressures on the real estate market continue to be severe, and we are purposefully adjusting our cost structure and operating strategy to concentrate resources on the Company’s most attractive opportunities. Beginning with our transition to the independent contractor model in 2010 and extending beyond today’s announcements, we are committed to identifying new ways to amplify the Company’s core strengths in technology and online marketing.”
This move comes after the company’s earlier change this year that changed the status of agents from employees to independent contractors. This latest change is expected by the company to result in a $20 million increase to the bottom line. More complete financial results from Zip Realty will be forthcoming with their regularly scheduled quarterly financial results in March.