“Look, similar to other technology companies that have gone before us, we strongly believe in taking big swings and failing fast. We have learned from our experience in Zillow Offers in Q3 and are applying those learnings as we look ahead.”
Those were Zillow CEO Rich Barton’s closing remarks on Tuesday’s earnings call, after the CEO shockingly announced the wind down of the Zillow Offers iBuying program, plus a pending lay off of 2,000 employees.
Is Zillow a technology company that may yet dominate U.S. real estate? Or is it a 16-year-old business good at aggregating home listings, but bad at developing beyond that? Here are five takeaways from yesterday’s news.
- Massive employee turnover.
A Zillow spokesperson confirmed Wednesday that the company expects to lay off 2,000 employees, or 25% of the 7,999 employees that Zillow reported having as of Sept. 30.
The current number of Zillow staff has, in fact, increased 32% in the last nine months, mostly due to Zillow’s iBuying ramp up, the spokesperson said. Also, iBuying represented 68% of Zillow’s $1.7 billion in quarter three revenue, and, of course, the lion’s share of the company’s expenses and debt (more on Zillow’s borrowing in a sec).
All which raises the question – Is the 2,000 jobs lost an excessively conservative figure?
Zillow has contended that it will reallocate employees to other divisions, but has not specified what those divisions might be. Barton did allude to a couple of reinvestment strategies on the call, including improving the virtual home shopping experience.
“One of the big things that we have invested a lot of people and R&D in is making that shopping experience much more immersive 3D, digital floor plans, and giving shoppers a much more realistic sense for what the home is like,” Barton said.
…Article continued on HousingWire.com.