As part of its exit from the home-flipping business, Zillow Group plans to lay off about 55 of its Texas employees.
The home-listing giant stated in a notice filed with the Texas Workforce Commission that the layoffs are due to the elimination of its Zillow Offers business, which was a iBuying service through which it bought, fixed-up and flipped homes in major Texas markets.
The layoffs first began in January with 33 employees, and the company plans to continue with the remainder in phases until August.
When Zillow announced in the fall that it would be shutting down Zillow Offers and reducing its workforce by about 25 percent over several quarters, Zillow Group CEO Rich Barton clarified that the forecasted home prices were more unpredictable than the company expected.
Although the notice stated that the affected employees would be limited to a Zillow office in Coppell, a company spokesperson clarified that it will reach employees across the state.
Zillow said in May that it had paid off all its debt related to buying homes in April as homes sold faster and for more cash than projected, according to the Dallas Morning News. The firm ended the first quarter with about more 1,300 homes in inventory nationwide that it expected to sell in the second quarter.
Zillow lost more than $880 million on its failed home-flipping business in 2021, which was responsible for the majority of the firm’s income — $6 billion of the $8.1 billion it generated — but none of its profits.
On average, Zillow lost about $25,000 on every home it sold — and that was before interest expense.
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Zillow is not the first company to layoff its Texas-based employees, with Austin-based real estate giant Keller Williams implementing a big layoff of its employees just last month.
Plano mortgage lender First Guaranty Mortgage Corp. also terminated 428 of its 565 employees this month as well, citing difficult market conditions in the mortgage industry as higher rates dramatically reduced home loan demand.
[Dallas Morning News] — James Bell