Struggling LoanDepot Will Cut Nearly 5,000 Jobs In 2022 As Part Of A Restructuring Plan
Struggling LoanDepot is the latest lender to announce layoffs. The company is preparing to lay off the largest number of employees in the mortgage industry this year. The company is eliminating 4,800 jobs over the course of 2022.
LoanDepot is also implementing a program dubbed “Vision 2025.” The program plans to save between $375 million and $400 million. This includes a headcount reduction and process optimizations. It is also consolidating real estate and reducing marketing and third-party spending.
Struggling LoanDepot will go from 11,300 employees at the end of 2021 to 6,500 by the end of 2022. The workforce reduction will result in the lender paying $3.5 million to $4.5 million in severance and benefits in the second quarter. In addition, they anticipate paying between $25 million to $28 million in the year’s second half.
The company also reported a net loss of $91.3 million in the first quarter. This compares to a net income of $14.7 million from the previous quarter. In 2021, LoanDepot made $427.9 million in profit. With the cost reduction, the company continues to target a return to run-rate operating profitability exiting 2022.
LoanDepot expects to save $2 million of real estate office costs. It also expects to save an additional $2.5 million to $3 million outside service expenses in the second quarter. For the year’s second half, it says the moves will save between $2.5 million and $3.5 million in real estate and $9 million in outside service costs.
The company also has $1 billion in cash according to its SEC filings.
LoanDepot is also making some leadership changes. Jeff Walsh, mortgage president, will lead mortgage origination functions and Zeenat Sidi, digital products and services president, will be responsible for digital lending and mortgage-adjacent products and services.
Also, Read About More Mortgage Industry Layoffs: