Big layoffs at Zillow

That's the popular Web site containing all sorts of gossipy information about how much your next door neighbor's house might be worth. Zillow will slash its Seattle-based workforce by 25 percent in the hopes of surviving what CEO Rich Barton calls "a major economic storm." The Puget Sound Business Journal says that 40 of its 145 employees will be let go. Peter Viles also has the story at L.A. Land. From Barton's blog:

The unprecedented economic events that are playing out on a global stage began in our own industry and have made a prolonged recession likely, in our judgment. We are a young company that is not yet making a profit. Despite having sizeable cash reserves, we deemed the responsible course was to meaningfully reduce expenses, so that Zillow emerges from the other side of the recession in a very strong position, even if the recession lasts many years.

Also this week, Redfin, the discount brokerage and listings website, said it was laying off 20 percent of its employees. The irony, of course, is that these sorts of sites have been generating huge amounts of traffic. Zillow.com had 5.4 million unique visitors in September, a 42 percent increase in traffic from a year earlier. Also, Zillow is one of the most heavily funded Internet startups in Seattle. But as we’ve come to realize, eyeballs and VC funding don’t necessarily translate into revenues.