Zillow has cut 80 jobs from its home buying and selling business, despite its big bet on the burgeoning sector.
The real estate giant doesn’t disclose how many of its 5,300 employees work for Zillow Offers. But a spokesperson told GeekWire the cuts would allow the company to invest in iBuying by “realigning our resources and staffing levels.”
iBuying has been one of the biggest trends in residential real estate in the past five years, but skeptics question whether the business model pencils out. For Zillow, cutting iBuying overhead could be a path to profitability.
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Zillow’s revenue jumps 28%, but losses mount
Opendoor, the market leader that is going public in a $4.8 billion deal with a blank-check company, has lost nearly $1 billion since it launched in 2013.
Zillow lost more than $300 million on iBuying last year. On average, it lost around $6,960 per home during the second quarter, according to the company’s financials.
Last month, it launched an in-house brokerage and said it would employ salaried agents in order to cut down on iBuying expenses. Previously, Zillow paid broker fees on both sides of the transaction. Now, it will just pay fees when selling the home.
[GeekWire] — E.B. Solomont