Main image of article Zillow Layoffs Show the Pitfalls of 'Disruptive' Strategies

In tech, sometimes the most ambitious plans crash and burn. 

Just ask Zillow, which thought it could “disrupt” the home-buying market with Zillow Offers, a program that involved the company buying houses and flipping them for a profit. That effort failed, largely because home prices have swung wildly in recent months, with no end in sight due to a confluence of factors; in order to make that profit, the company would have needed to scale Zillow Offers well beyond its current capabilities.

"We've determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility," Zillow Group co-founder and CEO Rich Barton wrote in a statement included in a company press release. "While we built and learned a tremendous amount operating Zillow Offers, it served only a small portion of our customers. Our core business and brand are strong, and we remain committed to creating an integrated and digital real estate transaction that solves the pain points of buyers and sellers while serving a wider audience."

Zillow will lay off some 2,000 workers and take a $500 million write-down on costs related to Zillow Offers.

As you might expect from a company that leverages technology to profit off the real estate market, Zillow pays its software engineers quite a bit. According to, which crowdsources salary data, mid-level engineers at Zillow make an average of $217,749 per year, including $153,583 in base salary, $45,833 in stock, and a bonus of $18,333. Senior engineers make an average of $253,751. That’s competitive with some of the biggest brands in tech. 

Over the past decade, numerous companies have attempted to use technology to disrupt an existing market. Some of these big bets succeeded; for example, Airbnb took what initially seemed like an odd concept (renting out people’s homes) and turned it into a substantial business. But not every effort succeeds, as Zillow proves. Hopefully any technologists who’ve been laid off can find a new position quickly.