Seattle-based Zillow Group, Inc. (Nasdaq: ZG) will lay off 47 employees in Seattle starting on Jan. 3, according to a Washington state Worker Adjustment and Retraining Notification (WARN).
The WARN, received Thursday, is the latest in a tumultuous week for the online real estate company, which announced Tuesday it is shutting down Zillow Offers, its direct homebuying service, and laying off 25% of its roughly 8,000 employees as a result. According to a Zillow spokesperson, the layoffs in the WARN disclosure will leave about 2,200 employees in Washington.
“I am the founder and first money into Zillow 16 years ago and am the largest individual shareholder,” Zillow co-founder and CEO Rich Barton said during the company’s third quarter 2021 earnings call on Tuesday. “It weighs heavily on me that our strategic decision to wind down the Zillow Offers operation after three and a half years involves having to let about 25% of our great colleagues go over the coming quarters. I'm sorry for how difficult and disruptive this will be. I am grateful to them. They have worked hard and will be missed. We are committed to providing a smooth transition for those affected.”
An early indicator of worse news to come was announced in October when Zillow said it wasn't buying any more homes through the end of the year. Completely shutting down Zillow Offers will take several quarters, according to the company. The decision marks a sharp reversal for Zillow, which had praised the success of Zillow Offers, despite a hot seller's market, during its second quarter 2021 earnings call in August.
"Zillow Offers value proposition of a fast, fair, flexible and convenient close has proved more than durable, even in this sizzling hot seller's market," Barton said during the company's Q2 earnings call. "I confess to being quite excited by how well Zillow Offers is doing in such a hot seller's market, which has me, for one, kind of probing at the perimeter of my penetration and (total addressable market) expectations."
According to MarketWatch, however, a recent KeyBanc analysis of 650 homes Zillow purchased found 66% were worth less than what Zillow paid for them.
In addition to direct homebuying and its platform to find a home, Zillow offers mortgages through Zillow Home Loans and a platform for partner agents called Zillow Premier Agent.
