The sandwich shops, coffee carts and dry cleaners clustered around Zillow's South Lake Union headquarters don't yet know how many of their lunch regulars won't be coming back.
Zillow Group cut more than 500 employees on Tuesday, Aug. 4, roughly 7% of its global workforce, in the Seattle-based real estate tech company's second and largest round of layoffs this year.
The company did not disclose how many of those workers are based at its Seattle headquarters versus remote offices nationwide, nor did it say which teams were affected or what severance departing employees will receive.
CEO Jeremy Wacksman framed the cuts as a cost discipline move in a company blog post. "These changes are about ensuring we have a disciplined cost structure and getting more efficient, with the right people in the right positions," he wrote.
A Zillow spokesperson told Real Estate News the cuts were not connected to the company's adoption of AI. Yet Wacksman told real estate executives at the T3 Leadership Summit in April that employees were being retrained to use AI tools, with productivity gains he described as small but compounding.
The layoffs landed one day before Zillow's second-quarter earnings report, scheduled for later Wednesday, Aug. 5. Wall Street analysts expect the company to announce roughly $758 million in Q2 revenue. The timing matters: Zillow executives told investors in May that spending would ease in the second half of the year, and cutting payroll is the most direct way to deliver on that promise.
Strong revenue, falling stock
Zillow's business has been growing faster than the housing market it serves. First-quarter revenue rose 18% year-over-year to $708 million, according to GeekWire, while the broader residential real estate industry grew just 2%. Net income climbed to $46 million from $8 million a year earlier. Rentals revenue alone jumped 42% to $183 million.
Despite those numbers, Zillow's stock has fallen more than 47% in 2026.
The company had 7,058 employees as of March 31. It cut about 200 jobs in January but characterized those as performance-related. It then backfilled nearly all of them before Tuesday's announcement, meaning the net workforce reduction from both rounds is roughly 500.
A pattern across Seattle tech
Zillow's cuts add to a mounting toll on Seattle's tech workforce. Amazon confirmed new layoffs in its artificial general intelligence division on July 23, after eliminating roughly 16,000 corporate positions worldwide in January, including 2,198 in the Seattle area. As we reported that week, the local labor market is shifting from software roles to logistics and security positions.
The real estate tech sector specifically is consolidating fast. CoStar cut its Homes.com inside-sales team by nearly 40% in recent months. Better founder Vishal Garg stepped down as CEO on Monday, Aug. 3. And Rocket Companies cut about 2% of its combined workforce after closing its $1.75 billion acquisition of Seattle-based Redfin in July 2025. Longtime Redfin CEO Glenn Kelman departed in January after 20 years leading the company.
Week ahead
Zillow faces an FTC antitrust trial later in August over its $100 million deal to become the exclusive provider of multifamily rental listings on Redfin's websites. Wednesday's earnings call may reveal whether executives plan further restructuring or whether the Aug. 4 cuts close the book on headcount reductions for 2026.
