Mortgage Industry Faces More Mass Job Layoffs. First Guaranty and Zillow Among Those Slashing Positions.
The mortgage industry faces another round of layoffs. First Guaranty Mortgage has become the latest industry player forced to lay off loan officers amid market shifts. The company revealed it will cut 428 employees at its Plano, Texas location. The a mass cut represents 75% of its workforce in the Dallas suburb.
Last week, the company submitted a layoff notice to the Texas Workforce Commission. The company alerted the state to the layoffs in compliance with the WARN Act. The WARN Act ensures a 60-day notice of mass layoffs.
SVP of Human Resources Cassie Vacante told regulators:
FGMC has experienced significant operating losses and cash flow challenges due to unforeseen historical adverse market conditions. In addition, FGMC’s recent efforts to obtain funding that could have prevented this layoff have proven unsuccessful.
The layoffs come on the heels of the company’s re-entry into the non-QM market. In October 2020, FGMC said it sought to help its partners expand their reach through non-QM. The company also stated they want to re-establish the firm as an industry leader in the non-QM space.
Mortgage Industry Faces More Layoffs Thanks To Embattled Zillow
This was a result of the shuttering of its Zillow Offers business. The layoffs are at the company’s offices in Coppell, Texas.
The company has laid off scores of workers following the failure of the Zillow Offers. The highly touted and expansion-driven business model failed to ignite with consumers.
The company released 2021 financial results. As expected, the company reported an $881 million loss in 2021 attributable to the algorithm-driven Zillow Offers.
As a result, Zillow announced a 25% cut to its workforce to be implemented incrementally over several quarters.