Century 21 Plans to Decentralize Administration; Layoffs Expected

In a move designed to give more power to its people in the field, Century 21 Real Estate Corp. said Monday that the giant chain is decentralizing its administrative operations.

The move, which will take several months to complete, will involve some layoffs as “hundreds of corporate employees are moved around in the system,” said Richard Loughlin, president and chief executive of the Irvine-based company.

Some layoffs will occur as jobs are transferred, Loughlin said, but the changes will also involve creation of a number of positions. As a result, the corporate staff should increase to about 650 employees from about 600 now.

Century 21, which says it handles nearly 10% of U.S. residential real estate sales, was the nation’s largest franchise operation in 1991 and is expected to maintain that position this year, said Steven Murray, co-publisher of Real Trends, a realty industry journal in Dallas.

Decentralizing its administration, Murray said, “definitely will make Century 21 even more competitive. Any time you put more bodies out there to work with your franchisees, it enables you to react more quickly to franchisee needs.”

Century 21 now has 13 company-owned regional headquarters, each responsible for the administration of as many as 300 franchise offices as well as for marketing, training and advertising for those offices and their brokers. Each region reports to corporate headquarters.

Under the reorganization there will be 32 regions, each responsible for about 100 sales offices. Each will report to one of seven division offices, which in turn will report to corporate headquarters in Irvine.

“Franchisees will function as they now do, but the regions will no longer deal with anything but performance”--franchise sales, consulting, training and advertising in the franchise offices, Loughlin said.

“All of the back-office stuff--the bookkeeping, record keeping and administration--will be done at the seven divisional headquarters.”

There also are eight independently owned regional Century 21 operations covering Virginia, Maryland, Delaware, South Florida, San Diego County and a portion of Orange County. According to Loughlin, all of the owners have said they intend to follow the corporate pattern and create smaller subregions.

Loughlin said the restructuring is meant to buck the “let’s cut our services and wait for good times” mentality in the battered real estate industry by spending several million dollars to bring more management functions closer to the company’s customers--its franchise holders.

Six of the divisional presidents have been chosen, Loughlin said, all of them heads of existing regional operations.

Those six divisions are based in New York, Detroit, Atlanta, Dallas, Chicago and, for Northern California, Walnut Creek.

The seventh position--for the Southern California division, based in Irvine--has not yet been filled, Loughlin said.

Regional directors who were not promoted to division president are being offered posts with the corporate staff or as heads of some of the subregions, he said.