RUTHLESS CAPITALI$M

More Zillow employees in Colorado hit by iBuying layoffs

In November last year, the Seattle company said it was shutting down its Zillow Offers line of business.

Zillow is exiting the "instant buyer" market after recording significant losses.

By Jensen Werley – Reporter, Denver Business Journal
Jan 31, 2022 Updated Jan 31, 2022, 3:50pm MST

Zillow Group Inc. (Nasdaq: Z) is laying off 36 total employees in the Denver area due to ending its iBuying service.

The company has filed a notice with the Colorado Department of Labor and Employment announcing additional Denver-area layoffs, on top of what was announced in November, following the closure of Zillow Offers.

As previously announced, the Seattle-based tech company said 20 individuals were laid off starting on Jan. 3 from the company’s Centennial office.

According to the letter filed on Jan. 20 as part of the Worker Adjustment and Retraining Notification (WARN) Act, an additional person was laid off on Jan. 17. Starting on March 21, 15 more people will be impacted. The layoffs will wind down over the course of the year and could involve more Denver area employees.

A Zillow spokesperson told Denver Business Journal that "laying off employees is always our last choice and not something we take lightly.”

"We intend to make the transition as smooth as possible for everyone affected," the spokesperson said. "Employees are receiving a severance package that includes at least 10 weeks of pay, six months of benefit costs covered, the value of the their next stock vesting paid directly to them, and outplacement services."

In November 2021, Zillow announced that it would end its direct buying service model, also known as iBuying. The company brought that service, which it called Zillow Offers, to the Denver market three years prior to the closure. Through iBuying, a homeowner can sell their home through a real estate tech company without having to list it or show it, in exchange for a service fee to the iBuyer.

Zillow first opened its Centennial office, located at 10771 E. Easter Ave., Suite 100, in 2015 after it acquired Trulia Inc. Zillow acquired Trulia for $2.5 billion, according to past DBJ reporting. Zillow had about 500 workers in the Centennial office as of July 2020, but at that time the company moved to a permanent remote-work model. The company told the DBJ on Nov. 3, 2021 that being full-remote makes the exact number of employees in Colorado harder to calculate.

When Zillow announced it was closing Zillow Offers, it said it expected to let go of about 25% of its workforce nationwide.

Shutting down the business is expected to take place over several quarters and will include offloading its current assets. As of Nov. 24, Zillow had canceled nearly 400 transactions of the 8,172 contracts it had with home sellers.

"For a small subset of customers closing later in 2022, we determined we can no longer support their closing and are releasing our earnest money to them," said Zillow spokesperson Matt Kreamer at the time. "Typically, homes close in 30 to 45 days."

The company first notified the state of Colorado it would permanently eliminate certain positions due to the closure on Nov. 4.

Denver is one of the top 20 best cities for buying homes online, according to home inspection calculator website Repair Pricer in an analysis based in part on Zillow data. Denver has a high number of home listings offering an online 3D tour, for example.

Zillow, meanwhile, is continuing with its other services, including putting out its market research.

A new study from Zillow shows that the combined value of Denver-area homes has skyrocketed, growing more than $400 billion since 2012. The metro area’s total housing market value in 2021 was $635 billion — the 17th highest in the nation, and a figure that puts Denver among metros like Portland, Oregon, Sacramento, California and Houston.

Colorado had a housing market worth $1.2 trillion, marking the first time the state’s housing market passed $1 trillion. It is one of 14 states with combined home values that high. It also gained the third-most market share in the country, just behind Florida and Texas.