The move should take several quarters and will also result in Zillow reducing its workforce by about 25 percent.
Just weeks after it paused new iBuying, Zillow on Tuesday made the startling announcement that it plans to shut down its iBuying operations altogether.
The move should take several quarters and will also result in Zillow reducing its workforce by approximately 25 percent.
The company made the announcement in an earnings report, saying the company plans “to wind down Zillow Offers, the company’s iBuying service in which Zillow acts as the primary purchaser and seller of homes.”
Company founder Rich Barton added in the report that “we’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility.”
“While we built and learned a tremendous amount operating Zillow Offers, it served only a small portion of our customers,” Barton continued. “Our core business and brand are strong, and we remain committed to creating an integrated and digital real estate transaction that solves the pain points of buyers and sellers while serving a wider audience.”
The report goes on to note that winding down Zillow Offers will likely take several quarters and involve laying off 25 percent of Zillow’s workforce.In a tweet shortly after the report went live Tuesday, Barton described “a tough day at Zillow.”
Tuesday’s earnings report shows that iBuying has been extremely costly for Zillow. While the company pulled in $1.7 billion in revenue during the third quarter of 2021, it also lost $328 million. Virtually all of those losses were from iBuying; the report shows that the Homes segment of the company actually lost a total of $422 million during between July and September. That loss was offset by profits Zillow’s internet, media and technology segment. However, the quarter ultimately reversed a trend from recent periods in which Zillow reported profits, not losses.