One reason for Zillow’s job cuts: dropping brokerage licenses
Why did Zillow lay off 25 percent of its staff in October (as we reported here)? A partial answer may be that the company has decided to relinquish its brokerage licenses in all but two U.S. states, thus cutting at least one cost center.
Zillow spokesperson Amy Bohutinsky acknowledged that dropping the brokerages was a cost-cutting measure, but also a strategic decision.
"We've come to a place where there is broad acceptance of Zillow in the industry and of our business model," Bohutinsky said. "We don't feel we need these licenses because we have zero intention of brokering transactions."
The company has long maintained that it obtained brokerage licenses in most U.S. states as a legal precaution to protect its ability to publish real estate-related information. CEO Rich Barton, writing on the company’s blog last year, called the licenses a “belt and suspenders” measure.
The brokerage licenses had fueled considerable speculation over the last two years that Zillow planned eventually to get into the business of brokering home sales. Those rumors now can be effectively put to rest.
