Zillow laying off one-quarter of its staff
Real estate website Zillow will lay off nearly one-quarter of its staff as it prepares to stop buying and selling homes, according to The New York Times.
The company made the announcement on Tuesday, citing heavy losses, the Times reported.
Zillow Offers, a division of the company that allowed instant offers to be made on homes, reportedly took a loss of more than $420 million during the three months ending in September. In the 12 months prior, the company brought in approximately the same amount.
Zillow’s chief executive, Richard Barton, acknowledged that the division was proving unsuccessful, the Times reported.
“We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated,” Barton reportedly said in a statement.
He also said that the decision to move forward with layoffs “weighed heavily” on him.
“We could blame the current losses on exogenous market events,” Barton said. “But it would be naïve to predict that unpredictable events won’t happen in the future.”
Shares of Zillow have reportedly fallen by 50 percent since a high in February, and the stock plummeted 11.5 percent on Tuesday.
Last month, the company reported that it would stop buying and selling houses due to a lack of employees to fix and flip the homes. On Tuesday, Barton revealed that the algorithm used to buy and sell homes had not made predictable profits, the Times reported.
The company is reportedly now seeking to sell its remaining 7,000 houses.