Redfin had good news and bad news this week.
The company announced a partnership Zillow to syndicate the listings giant as the exclusive provider of multifamily rental listings on Redfin and its sites. But the Seattle-based brokerage also disclosed in an SEC filing it is laying off 450 employees in its rental division.
The cuts are expected to take place between this month and July and appear to be a direct result of the partnership between the two companies. Redfin expects to incur charges between $18 million and $21 million as a result of the restructuring, according to the filing, with most of the charges recognized by the end of the second quarter.
Under the agreement, Redfin will syndicate Zillow’s multifamily rental listings — properties with at least 25 units — on its sites, including Rent.com and ApartmentGuide.com. Zillow agreed to pay $100 million for those syndication rights.
“We believe it will increase our overall traffic and the profits from our rental business, letting us focus on what we do best: dazzling online listing search, paired with dazzling brokerage, lending and title service,” Redfin CEO Glenn Kelman said of the partnership.
The brokerage has seen scores of layoffs in recent years. Just last month, the company let go of nearly 50 employees in management, field leadership and programming roles.
Last summer, more than 80 employees were sacrificed in a “targeted layoff.”
The company had a trio of layoffs cutting 470 employees, then 862, then another 201 in a 12-month span starting in June 2022.
The brokerage is due to report its fourth-quarter earnings at the end of the month. In the hours after the announcement, Redfin’s stock was up more than 10 percent on the day.
Zillow, meanwhile, continues to expand in the multifamily rental marketplace. At the end of last year, it had 50,000 properties advertised across its platform, up from 37,000 properties at the end of the previous year.
In the fourth quarter, Zillow’s revenue rose 17 percent to $554 million from $474 million, beating analyst estimates according to the Wall Street Journal. The company also narrowed its losses from $73 million to $52 million.
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