LendingClub in San Francisco plans to lay off 225 employees to offset reduced marketplace revenue tied to rising interest rates.
The lender said in a press release that cutting 14% of its workforce should result in annualized run-rate savings of $25 million to $30 million. The layoffs include Valerie Kay, the company’s chief capital officer, according to a regulatory filing. She joined LendingClub in 2016.
LendingClub said it expects to incur $5.7 million of pretax charges tied to the layoffs, with $4.4 million occurring in the fourth quarter.
“We remain committed to championing the financial success of our customers while generating long-term profitable growth amid an increasingly challenging economic environment,” Scott Sanborn, LendingClub’s CEO, said in the release.
“We have proactively implemented various measures to make this happen, including the very difficult decision to reorganize and reduce our workforce,” Sanborn added. “These measures enable us to more closely align our expense structure to loan volume and revenue, while ensuring effective execution against our strategic priorities and long-term vision.”
LendingClub said it originated $2.5 billion of loans during the fourth quarter.
The company estimated that it earned $21 million to $24 million in the quarter, resulting from $260 million to $263 million of revenue.
The company said its estimates include previously mentioned workforce reduction charges and the impact from buying a roughly $1.1 billion loan portfolio from MUFG Union Bank.
LendingClub in April 2020 announced plans to lay off 460 people, including Steve Allocca, its president. Those cuts represented about 30% of its workforce at the time.