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Zillow Layoffs- Behind the Scenes and the Future

Realities of Tech Walk-Outs

My experience in the tech sector is not something I talk about often, but one of my worst memories was watching entire divisions disappearing virtually overnight. Imagine sitting at your desk, a guard and team lead walk up and ask you to pack your desk. Your badge is taken as you pack your things that in some cases may have been already packed while you were at lunch. You are walked out of the building and the door is closed behind you- we called them “locked out.”

The reality is that these companies are very protective of data, and warning of upcoming terminations would only give an upset staffer the opportunity to plot revenge.

This was the 1.0 way of doing business- the early bubble bursting was the worst and this style of termination was (and maybe still is) common place.

Fast Forward to 2008

Zillow took a more 2.0 approach with their layoffs according to David Gibbons with Zillow, “this is our family, they’re like family that have been with us since the beginning.” David went on to describe how awkward the old fashioned walkouts were when running into terminated employees on the street and how it seemed to create animosity where it wasn’t needed.

Who/What Was Cut?

Although I could tell David (and Drew) wanted tell us more about their personal relationships with the names behind the layoffs, David explained just how personal it was to him instead. He explained that the company is actually very small, and describes the company as three parts- the first of which is product, which consists of engineers, seo, java programers and other dedicated talent. If you’ll remember, in the beginning, Zillow went on a hiring frenzy, snapping up the best of the best- these are no ordinary geeks.

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Zillow’s middle division is business where an equal number was cut- the business division makes up the business development, public relations and other mission critical departments, and David makes no bones that Zillow had spared nothing when scooping up the best in its original march to world domination.

The Future is the Sales Department

The sales department rounds off the third section which also took a hit, however, this is exactly the tool Zillow will use to sharpen its game to cut through the recession. Obviously, as a media company, sales will be pivotal in profitability, and Zillow absolutely intends to get more aggressive in explaining its offering to real estate professionals. David says, “we have proven our value in marketing, but not selling.”

My Take

When Zillow decided to take over the world, it’s a known fact that they were aggressive in hiring the cream of the crop to build Zillow, and with these layoffs, David agrees that there is an opportunity for other startups in the real estate space (and otherwise) to take advantage of the talent Zillow parted with today. Headhunters have a golden opportunity to reach out to folks that were loyal a week ago and snatch up even more talent from those waiting to make tough cuts.

I suspect many of those that turned down new opportunities with more established companies may be kicking themselves about now as fears mount in the tech sector of who’s next from sites engaging in fear mongering like Tech Crunch. I would advise anyone in the tech sector that has elite staff to make the cuts immediately and try the ripping the band-aid approach as opposed to the slow drip, or talent may be lost that companies never intended on losing.

The good news in all of this is that we receive every single week more and more releases from startups in the real estate space and often times their expansion means they’re looking for talent that is experienced in the ground-up dynamics of a startup, and the talent many of these firms are canning may end up filling the half full glass of a thirsty venture.

It may not feel good to the folks that were laid off this week, but what is happening appears to be for the better in my humble opinion. A small burst early on of a bubble may be just what the Dr. ordered when you understand that it asks the tech sector to take a deep breath, trim the fat, and look at the long term which should actually help to create more stable and more profitable companies in the end that are stable for these very talented folks.

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Benn Rosales is the Founder and CEO of The American Genius (AG), national news network. Before AG, he founded one of the first digital media strategy firms in the nation has received the Statesman Texas Social Media Award and is an Inman Innovator Award winner. He has consulted for numerous startups (both early- and late-stage), and is well known for organizing the digital community through popular offline events. He does not venture into the spotlight often, rather he believes his biggest accomplishments are the talent he recruits and develops, so he gives all credit to those he's empowered.



  1. Rachel Foster

    October 17, 2008 at 9:15 pm

    Even though there are layoffs, I still see tons of high paying jobs posted on employment sites – (networking) (aggregated listings) (matches you to jobs)

    People that look will find jobs.

  2. Glenn

    October 18, 2008 at 5:24 am

    Benn – truly sorry you had to experience layoffs using this method. However, starting in the mid-70’s a management control was evaluated to determine if resignations or terminations where an indivdual had access to sensitive information, a final paycheck was issued and the employee asked to leave immediately. And there were provisions that the supervisor or manager along with security be present. Personally I don’t like it, but when looking at the business aspects it is the right thing to do.

    Layoffs as Zillow is experiencing is gut turning and emotional for both the employee and the employer.

    Hopefully, Zillow’s staff reduction took place in the right departments – however, when one considers that the finite number of real estate professionals will shrink over the next year, as it did this year, one has to wonder if this statement is a wise one “Obviously, as a media company, sales will be pivotal in profitability, and Zillow absolutely intends to get more aggressive in explaining its offering to real estate professionals.”

  3. Steve Simon

    October 18, 2008 at 6:40 am

    Benn in banking when the Fed’s come at 4:00pmon Friday to take you over there isn’t much notice;
    In politics they ask for the key and your things have already been packed up for you, most have a few weeks, some only days.
    I remember in my younger days a wholesale termination was taking place in a major insurance and financial concern (based out of Fort Wayne Ind.) The bosses from another agency came in to the startled employees amazment and then watched as the unlucky folks had to pack and leave (this was explained later to be done to protect the client information that would have been at risk if any notice had been given).
    The dollar signs and the bailout cures and the media oft change the outdie viewers focus;but rest assured there is terrible pain borne by humans at the bottom of the pile…
    Just my thoughts 🙂

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