Great piece on GeekWire covering how Zillow CEO Rich Barton is directing team to weather coronavirus storm. A few excerpts on Zillow’s plans and current cash position below, and link to full story above.
On the call, Barton revealed that Zillow will slash expenses by 25% this year; freeze hiring across the company; cut nearly all marketing spend; and suspend home-buying through its Zillow Offers business. The moves come in response to social distancing mandates in various locales related to the coronavirus crisis and uncertainty in the U.S. real estate market. Zillow employed 5,249 people as of Dec. 31.
Even if revenue was dramatically impacted from the company’s profit-driving businesses and Zillow struggles to sell homes with Zillow Offers, it would still have $1.35 billion in cash by the end of 2020.
Zillow Offers, which rolled out a year ago, is the company’s big new bet and allows homeowners to quickly sell their house. It brought in $603.2 million in revenue this past quarter, nearly two-thirds of total company-wide revenue. Zillow sold 1,902 homes and purchased 1,787 homes, ending the quarter with 2,707 homes on its balance sheet. That inventory had been reduced to 1,860 homes as of March 19.
“We can pause this [Zillow Offers] business, keep the apparatus in place, and still run our other business,” Barton said. “There’s no change in how we feel about the Zillow Offers opportunity long-term, and we are really happy that we have this optionality and flexibility.”