RISMEDIA, Oct. 15, 2007-ZipRealty, Inc. announced that, due to ongoing challenges in the residential real estate and related home mortgage markets, the company has taken steps to reduce its cost structure to align it to current market conditions. Specifically, management expects it can lower its current operating expense structure by approximately $4 million annually. The majority of these reductions come from the elimination of positions in the corporate headquarters and the field offices, and the remainder is expected to come from improvements in operating efficiencies. As a result of this plan, the company expects to incur one-time, employee termination costs of less than $250,000 in the fourth quarter of 2007.
Management noted that this cost rationalization plan will not affect its previously announced decision to expand into new markets in 2007, nor will it affect ZipRealty’s ability to support its agents as they continue to deliver value to home buyers and sellers in all markets.
Pat Lashinsky, CEO and President of ZipRealty, commented, “Given the uncertainty of today’s current residential real estate and home mortgage markets, we felt it was prudent to adjust our cost structure and better align to market conditions. Although we will realize a small portion of these cost savings in 2007, the net impact of our plan will be far more evident in 2008. We are also revising our revenue guidance for the full fiscal year 2007 to a range of $97.5 to $102.5 million from previous guidance of $105 to $110 million. In combination with the development and maturity of our existing markets, we believe today’s actions will facilitate greater efficiencies as we execute our plan.”
Management will further discuss the expected impact of the decisions announced on the company’s 2007 and the full year 2008 financial results in greater detail on its upcoming third quarter earnings call which will be held on November 7, 2007. A separate announcement with specifics of the call will be issued in the coming weeks.
For more information, visit www.ziprealty.com.