GoKawiilOn Tuesday morning, August 4, 2026, just over five hundred people at Zillow Group learned they no longer had jobs. Their managers learned at the same moment they did. Nobody was pulled aside the day before, nobody got a conversation, nobody got a warning. In a company that has spent five years celebrating itself as a distributed, remote-first workplace it calls Cloud HQ, that is what a layoff looks like now. A message arrives on a laptop somewhere, and then access to everything goes away.
The cuts amounted to roughly seven percent of Zillow’s global workforce. They landed one day before the company reports second quarter earnings. And they came at the end of the most financially successful stretch in the company’s twenty year existence.
That last sentence is the whole story, so let me put the numbers behind it.
A Record Year
In 2025, Zillow generated $2.6 billion in revenue, up sixteen percent. It reported $622 million in adjusted EBITDA at a twenty four percent margin. It produced $420 million in free cash flow, up thirty six percent year over year. It ended the year with $1.3 billion in cash and investments.
And it posted $23 million in GAAP net income. That was Zillow’s first annual profit since 2012, when it was a much smaller pre-merger business, and it ended twelve consecutive years of losses running from 2013 through 2024, a stretch that includes the $528 million wipeout in 2021 when the company shut down its house flipping operation.
The first quarter of 2026 was better still. Revenue rose eighteen percent to $708 million against a residential real estate industry that grew two percent. Net income came in at $46 million, double what the entire prior year had produced, on diluted earnings per share of nineteen cents against three cents a year earlier. Adjusted EBITDA hit $182 million. Operating cash flow nearly doubled to $200 million.
This is not a company in distress. This is a company outgrowing its own industry by a factor of nine, generating cash at record rates, and telling investors every quarter that its strategy is working.
Then it cut seven hundred people in six months.
The Claim With No Evidence Behind It
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