Zillow Fires 25% Of Workforce, Scraps Robo-Flipping Program After Huge Loss
On Monday we reported that Zillow Group had ‘halted‘ it’s AI-powered house-flipping operation after 93% of homes listed in their Phoenix portfolio are underwater, and is scrambling to unload 7,000 homes for $2.8 billion.
Today, the company announced during earnings that it’s going to reduce its workforce by 25% and completely scrap its home-flipping operation which began buying homes in December 2019.
The decision comes after the company lost more than $380 million on the program called Zillow Offers – which hit a major snag in recent months after the algorithm monumentally overpaid for houses right as the US real estate market began to cool.
Zillow plans to take writedowns of as much as $569 million, according to Bloomberg.
The stock, needless to say, is not happy after hours – dropping as much as 10% in extended trading, only to see buyers reel it in to flat as of this writing.
Tyler Durden
Tue, 11/02/2021 – 16:20
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