Dive Brief:
- LendingClub is cutting 172 jobs, or 14% of its workforce, as the San Francisco-based firm implements measures to help it navigate macroeconomic headwinds, the company announced Thursday.
- The firm, which connects borrowers and lenders, said it expects to save approximately $30 million to $35 million in compensation and benefits annually from the cuts.
- The cuts are the company’s second this year, as the firm faces reduced marketplace revenue in the wake of the Federal Reserve’s interest rate increases. LendingClub in January cut 225 employees, which also represented 14% of its workforce at the time.
Dive Insight:
“We continue to proactively implement various measures to navigate the persistent and ongoing macroeconomic headwinds and the resulting pressure in our marketplace, primarily driven by higher interest rates,” LendingClub CEO Scott Sanborn said in a statement Thursday. “To that end, we have made the very difficult decision to streamline our workforce.”
Expressing a longer-term outlook, Sanborn said the company expects marketplace revenue to rebound as consumers take steps to refinance their credit-card debt.
The company, which will report third-quarter earnings Oct. 25, said revenue for the period is expected to be between $198 million and $200 million, with net income between $4 million to $5 million.
The latest layoffs at LendingClub, which has a bank charter from its 2020 acquisition of Radius Bank, come as other financial services firms have reduced their headcounts in recent months.
Pittsburgh-based PNC has begun a 4% staff reduction, according to the bank’s third-quarter earnings presentation.
That means the Pittsburgh-based lender could cut more than 2,400 employees, based on headcount figures from December, which put the bank’s workforce at 61,545.
Ally Financial also began cutting jobs last week, a measure that could affect more than 500 employees. Wells Fargo announced last month it would close a corporate office in Columbia, South Carolina, affecting 525 workers.
Other lenders, including Citi, Truist, Barclays and Goldman Sachs, also indicated last month that they expected to shrink headcount.
