The identical day Seattle-based actual property corporations Zillow and Redfin introduced a $100 million partnership, Redfin disclosed it might lay off 450 workers within the course of.
Zillow mentioned in an earnings name Tuesday that it might change into the only real supplier of multifamily rental listings on Redfin and its subsidiaries, ApartmentGuide.com and Hire.com. Leases are a rising enterprise for Zillow, which reported 25% annual income progress for its leases section within the remaining three months of 2024.
A subsequent regulatory submitting from Redfin on Tuesday disclosed the phrases of the deal. Zillow can pay Redfin $100 million to change into the unique associate for multifamily rental listings.
Redfin mentioned within the submitting it should restructure its leases section for the partnership which can end in $18 million to $21 million in bills for the corporate. Staff in its leases enterprise will likely be laid off between February and July.
Only a few of the layoffs will have an effect on Washington workers, a Redfin spokesperson mentioned in an emailed assertion Thursday. Affected workers will likely be eligible for severance and medical insurance assist.
“A layoff of this magnitude is painful, however this partnership is greatest for our prospects and for Redfin general,” the spokesperson mentioned. “Our focus stays on constructing the most effective on-line residence search, and pairing it with the most effective brokerage, lending and title service.”
As of 2023, Redfin had 4,693 workers, in response to its most up-to-date annual report. The corporate will launch its subsequent annual report on the finish of February.
In November, throughout Redfin’s third-quarter earnings, the corporate reported a web lack of $33.8 million and CEO Glenn Kelman apologized to shareholders. The loss, a 78% enhance in contrast with the identical quarter of 2023, was a results of the growth of the Redfin Subsequent pay plan for actual property brokers, Kelman mentioned.
That is the second spherical of layoffs at Redfin this yr. The primary was final month and it hit 46 workers, largely in management roles, GeekWire reported.
Redfin additionally laid off lots of of workers in 2022 and 2023 because the housing market cooled and the corporate stopped its home-flipping enterprise. The corporate introduced in June 2022 that it was shedding practically 500 workers, adopted up by 862 workers in November 2022. In April 2023, Redfin laid off an extra 201 folks.
