CoStar’s plan to cut its investment in Homes.com is being accompanied by a sizable cut to the residential platform’s staffing ranks.
The firm laid off approximately 200 people from the Homes.com division this week, a person with knowledge of the matter told Inman. Details on where the cuts were concentrated within the 8,000-person workforce were not disclosed.
“To align our organization with these strategic objectives and position the company for continued success, we have made the difficult decision to eliminate certain roles within the organization,” a CoStar spokesperson said in a statement; the company plans to pursue artificial intelligence, announcing an AI search assistant one day before the layoffs were revealed.
The workforce reduction comes weeks after CoStar reversed course on its billion-dollar bet to get into the residential market with Homes.com.
In a yearly outlook announcement at the start of the year, CoStar said it will reduce its annual net investment in the division by 35 percent in 2026 to $550 million, down from $850 million the previous year. The firm will continue to cut its investment by at least $100 million annually until 2030.
CoStar has been facing pressure from multiple activist investors to reset its strategy regarding the residential platform.
This month, hedge fund D.E. Shaw publicly called for a board shake-up and strategic reset days after Third Point launched its own broadside against the real estate data company. D.E. Shaw blamed CoStar’s prolonged stock slump on what it called a “high-risk, money-losing” investment in Homes.com, the consumer listings platform CoStar has spent billions trying to scale.
CoStar, founded by Andy Florance in the 1980s, built its dominance in commercial real estate data, becoming essential for brokers and investors across office, multifamily and hospitality. About five years ago, however, the company expanded into residential by acquiring Homes.com, taking on Zillow and Realtor.com in a costly, consumer-facing battle.— Holden Walter-Warner
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