Homestore.com, Inc. (Nasdaq: HOMS), which owns or operates Realtor.com, HomeBuilder.com, Homestore.com and other major real estate sites, has announced an organizational realignment and cost reduction plan.

"The new alignment," said the company, "will focus the company more tightly on its core customer segments, allow increased operational efficiencies and reduce costs, in part, through the release of up to 700 employees or about 20 percent of its workforce. The company expects to take a fourth quarter charge for costs related to the implementation of this plan and provide more details on its third quarter conference call scheduled for Nov. 1st."

"While the reduction in staff is difficult, it is necessary to ensure the continued strength of the valuable franchise that we've established over the past five years," said Stuart Wolff, chairman and chief executive officer.

A second element of the plan includes the establishment of two primary operating groups, said the company.

1. A Real Estate Services Group that will operate the company's businesses focused on serving customers in the real estate industry. Led by Pat Whelan, president, the group will include the company's REALTOR.com, HomeBuilder.com, Homestore.com Apartments & Rentals units and other real estate business units.

2. A Retail and Consumer Services Group that will operate the company's businesses focused on localized merchants and service professionals as well as consumer direct services. Led by John Giesecke, president, the new unit will include the company's iPlace, Welcome Wagon and Local Online Businesses.

In addition, the company is establishing a Corporate Development Group led by Allan Merrill as executive vice president, to handle mergers and acquisitions, business development, corporate partnerships and advertising sales. Merrill will continue to be responsible for the company's key relationships in the new home category.

Source: Company News Release