Zillow CEO Jeremy Wacksman said the company expects its leasing costs to drop by about $16 million over the next four years and anticipates earning $26 million in sublease income during the same period.
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Although the era of remote work is done at Amazon, Google, AT&T and Disney, Seattle-based residential portal Zillow is sticking with its ‘Cloud HQ’ model.
Jeremy Wacksman | Credit: LinkedIn
“We pivoted the company and committed to [a cloud-headquartered or CloudHQ] model almost five years ago now, and it’s been fantastic for us,” Wacksman told Entrepreneur in an interview on Monday. “Different strategies work for different companies. For Zillow, the size we are, the type of workforce we are, CloudHQ has been a huge benefit for us.”
Wacksman, who took the CEO helm in August, said Zillow’s commitment to remote work has allowed the company to expand its recruitment efforts and hire talent across the U.S.
“We now see four times the number of job applicants for every job we have versus what we did before the pandemic,” he said.
Although the remote model has been praised for providing a better work-life balance, reducing barriers for people with disabilities, and increasing flexibility for working parents, the one drawback opponents often highlight is a potential breakdown of company culture.
However, Wacksman said Zillow has been able to avoid that breakdown by maintaining several office spaces in New York, Irvine, and Seattle that employees can use to host meetings, complete trainings or knock out everyday tasks. The company also hosts social events that allow co-workers to build bonds outside of work.
“While folks work at home predominantly, we have lots of gatherings, lots of ways for folks to get together and meet in 3D,” he told Entrepreneur. “The flexibility that comes, the collaboration that we get, and the intentional time we have together really gives us the best of both.”
Beyond improving the company’s adaptability, remote work has also buoyed Zillow’s bottom line.
Since switching to a Cloud HQ, Zillow has reduced its office footprint 73 percent from 1,046,413 square feet to 274,771 square feet.
The company shuttered its Denver and Overland Park offices and dramatically downsized its offices in Seattle, New York, Atlanta, San Francisco and Irvine, a Seattle Times deep dive into Zillow’s US Securities and Exchange Commission filings revealed. Zillow’s office reduction measures reduced the company’s leasing costs from $54 million in 2022 to $34 million in 2024.
The company expects its leasing costs to drop to $18 million over the next four years, and anticipates earning $26 million in sublease income during the same period.
Zillow closed 2024 on a strong note, with the company increasing its full-year revenue 15 percent year over year to $2.2 billion, according to its latest earnings report. The company still isn’t profitable; however, slimmed net losses from $153 million in 2023 to $112 million in 2024.
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