Zillow Cuts 500 Jobs, 7% of Staff, Ahead of Q2 Earnings

Zillow is laying off just over 500 employees, about 7% of its workforce, CEO Jeremy Wacksman said in a blog post Tuesday. The cuts come a day before the company reports second-quarter earnings.

Wacksman framed the reductions as an organizational overhaul, not a response to a deteriorating housing market. The platform for renting, buying and selling homes “continues to outperform its category, despite a flat housing market,” he wrote. But he added that “continuing to grow at scale requires us to work differently.” The changes are about “ensuring we have a disciplined cost structure and getting more efficient, with the right people in the right positions.”

As of March 31, Zillow had 7,058 employees, according to an SEC filing. The 500-plus cuts represent the biggest headcount reduction since the company ended its iBuying program in 2021, which led to a 25% staff cut at the time.

The layoffs land at a delicate moment. Zillow reports Q2 results Wednesday after the close. When it posted first-quarter numbers in May, revenue hit $708 million, up 18% from a year earlier. That growth outpaced the broader residential real estate industry, which expanded 2% in the same period. For Sale revenue rose 12% to $514 million. Rentals revenue surged 42% to $183 million.

Wacksman, in the May earnings release, credited “the consistency of our execution, the strength of our brand, our audience engagement and the durability of our multi-year strategy.” He also highlighted AI integration across the platform.

The job cuts suggest management sees a need to tighten spending even as top-line growth remains solid. The housing market has been stuck in a low-turnover rut, with mortgage rates above 6% pinching both buyers and sellers. Zillow’s rentals business, which now accounts for more than a quarter of revenue, has provided a growth cushion. In November, the company launched CreditClimb, a $20-a-year tool that reports on-time rent payments to the three major credit bureaus.

AlphaScala’s proprietary score for ZG stands at 43 out of 100, labeled Mixed, reflecting the tension between revenue momentum and the cost-reduction signal from the layoffs. The stock page is here.

The question for Wednesday’s print is whether the cuts are a one-time efficiency play or a sign that the flat housing market is starting to bite harder than the Q1 numbers showed. For broader stock market analysis, the housing and real estate services sector remains under pressure from rates and affordability.

Zillow reports after the bell Wednesday. The call will likely focus on whether the rentals business can keep growing at 40%-plus and whether the For Sale segment can hold its gains without a pickup in transaction volume.