LendingClub Announces 14% Job Cuts, Expects $25M-$30M Savings
LendingClub, a prominent online lending platform, has revealed substantial job cuts and provided an update on its financial outlook. The company plans to reduce its workforce by 14%, impacting 225 employees, and expects to save $25 million to $30 million annually in compensation and benefits as a result.
The layoffs are set to incur pretax charges of $5.7 million, with $4.4 million of this amount included in the company's fourth-quarter earnings. LendingClub attributes this decision to reduced marketplace revenue, which has been affected by recent interest rate increases implemented by the Federal Reserve.
For the fourth quarter, the company anticipates revenue to be between $260 million and $263 million, and profit to be between $21 million and $24 million. These figures factor in the impact of a $1.05 billion personal loan portfolio purchase from MUFG Union Bank, which LendingClub completed earlier this year. It is worth noting that LendingClub obtained its bank license in 2020 through the acquisition of Radius Bank.
LendingClub's workforce reduction and financial projections reflect the company's response to current market conditions. The layoffs are expected to generate significant annual savings, while the company's fourth-quarter financial performance is projected to be within the given ranges, taking into account the impact of the portfolio purchase.
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