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(GeekWire File Photo / Nat Levy)
This story originally appeared on Real Estate News.
While a new listings partnership between Redfin and Zillow is expected to benefit both companies in the long run, it comes at a cost for some Redfin employees.
In an SEC filing ahead of its fourth-quarter earnings report, Redfin announced plans to restructure its rentals segment — a move that will “eliminate certain employee roles” that support the rentals division. An estimated 450 positions will be cut between February and July 2025, and the restructuring is expected to be completed by the end of September.
Why now? The news follows the Feb. 11 announcement of a rentals-focused partnership agreement between Zillow and Redfin. According to a news release, Zillow — which reported 25% annual growth in its rentals business in the fourth quarter of 2024 — will become the exclusive provider of multifamily rental listings on Redfin and its owned rental sites, Rent.com and ApartmentGuide.com.
Redfin CEO Glenn Kelman said the agreement will allow his company to focus on other aspects of its business, including lending and title services, while giving “Redfin visitors access to one of the largest and fastest-growing databases of rental listings.”
Zillow is paying Redfin $100 million to secure the exclusive agreement, while Redfin estimates it will incur between $18 million and $21 million in expenses to restructure its rentals segment.
Real Estate News reached out to Redfin for further details about the restructuring and layoffs and was told the company had no additional information to share.
Financial outlook: Redfin’s fourth quarter earnings release is scheduled for Thursday, Feb. 27 after the stock market closes. During its last earnings call, the company reported a small increase in revenue year-over-year, but also posted significant losses which it attributed to the expansion of its Redfin Next agent pay plan.
Kelman said at the time that the program will ultimately strengthen the company’s sales force, providing a competitive advantage when the market improves, but he also apologized to shareholders for failing to make a profit last year. The rentals partnership announcement appears to have pleased investors, however, as Redfin stock was up more than 11% on Feb. 12.
A series of layoffs: This marks the third — and largest — round of layoffs at Redfin in seven months following other targeted cuts in January and August.
Last month, 46 employees working primarily in managerial roles were let go, according to a statement provided to GeekWire. The August layoffs involved positions in the company’s Concierge service, with fewer than 100 people impacted.
