RICHMOND, Va. — CoStar Group, Inc. laid off more than 100 people from its downtown Richmond offices this week, according to a company statement and individuals familiar with the job cuts. The company, which has more than 2,500 employees in the Richmond area, cited the use of artificial intelligence as one reason for the layoffs.
"The company expects to eliminate roles in 2025 from efficiencies gained by using AI and reallocate those resources to other areas," said a company spokesperson. CoStar Group sees rapidly growing value in leveraging artificial intelligence to improve content creation, drive operational efficiencies, and build the next generation of digital real estate user interfaces.
CoStar Group operates real estate websites like Homes.com and Apartments.com. Some of the recently laid-off employees worked on researching and creating real estate listings for neighborhoods across the nation. The company stated some layoffs were also due to "normal annual performance management" practices.
Despite the downsizing, CoStar announced plans to hire around 500 new salespeople for Homes.com and 100 new market analysts. They also plan to hire another 500 people upon completing their acquisition of Matterport. "The company will complete its major one million-square-foot campus development along the James River in May 2026. Upon completion, the campus will be nearly full and house 3,500 employees," the spokesperson added.
“It doesn’t surprise me at all,” said Milos Manic, an AI professor and director of VCU’s Cybersecurity Center. “AI has been around for decades, but the growth has surpassed exponential growth.” Manic's research shows other businesses and industries will soon follow suit, making adjustments to their workforces to balance technology with increased efficiency and quality.
“We don’t have a choice. If one industry doesn’t pick up on AI capabilities, the other one will,” Manic stated. “If they don’t, they will likely stagnate and possibly even disappear.” While he acknowledges AI as the future, Manic urges there’s no reason to panic. Just as people adapted to the internet, he believes companies will find equilibrium with AI’s implementation.
“Some jobs, possibly many, will change,” he warned. “But even though this change is happening faster than any other technological advancement, we still have time, and we still are active participants.”
CoStar's proactive steps, including hiring new employees even amid layoffs, reflect the company's strategy to embrace technological changes rather than simply reduce headcount. The integration of AI is viewed as part of the inevitable shift companies must undertake to remain competitive.
The recent layoffs at CoStar highlight the continuing trend of companies adapting their strategies to incorporate technology like artificial intelligence, often at the cost of traditional roles. The company's focus on AI to streamline operations suggests broader industry shifts, as businesses across sectors look to optimize their efficiencies amid technological advancement.
Experts like Manic advocate for preparing the workforce for these transformations, emphasizing the need for retraining and reskilling initiatives to help workers transition to new roles borne from AI advancements.
“Employers will be forced to rethink how they view their employees and the skills required for different positions,” he added. CoStar's strategy might well be indicative of the future—an era where traditional jobs are increasingly merged with technology, necessitating new skill sets and approaches to work.
With pre-existing industries re-evaluated and restructured around these innovations, the broader implication is clear: businesses adopting AI will likely emerge as leaders, adapting more swiftly to market demands.
For the Richmond community, these changes represent both challenges and opportunities. The future CoStar campus, slated to open its doors fully by 2026, shows promise for local economic growth as new positions will arise, indicative of the balance between job cutbacks and new beginnings.
This balance is cited as integral by local business leaders and educators alike as they prepare the next generation of employees to tackle such challenges head-on. CoStar’s shift is part of a larger narrative of industry evolution and modernization, prompting stakeholders to reconsider how best to equip their workforce.
Despite layoffs making headlines, CoStar's intent to strengthen its workforce through hiring initiatives, especially post-Matterport acquisition, sends encouraging signals to the market. The commitment to sustainability and growth remains pivotal, even as they navigate transitional hardships.
For those affected by the layoffs or those seeking to participate in the real estate market as employees, adaptation is key. Repositioning skills and leveraging technological know-how will only become more important as industries evolve to embrace the future.