FinTech: LendingClub Fires 14% Of Employees Citing Difficult Economic Conditions

October 13, 2023 | FinTech, News

Scott Sanborn, Chief Executive Officer, LendingClub, on the challenges from rising interest rates: “We have made the very difficult decision to streamline our workforce. Longer term, we expect marketplace revenue to rebound as we capture the historically large credit card debt refinancing opportunity.”

LendingClub (NYSE: LC), a prominent player in the financial industry, has unveiled a comprehensive plan aimed at aligning its cost structure with the rapidly changing, and increasingly adverse, macroeconomic landscape. In light of persistent macroeconomic challenges, driven primarily by rising interest rates, the company has decided to take proactive measures. Scott Sanborn, the Chief Executive Officer of the company, acknowledged the difficulties ahead and highlighted the need to streamline their workforce. This tough but necessary decision will result in a reduction of about 14% of the company’s workforce, equating to 172 employees. Importantly, this move is expected to yield substantial annualized cost savings, ranging from $30 to $35 million compared to the second quarter of 2023. (LendingClub)

Regarding its financial performance in the third quarter of 2023, LendingClub reported the origination of approximately $1.5 billion in loans. Preliminary estimates suggest that the company’s revenue for the same period will be in the range of $198 to $200 million, with a projected net income between $4 and $5 million. These figures take into account most of the severance charges incurred during the third quarter.

Furthermore, the company has scheduled the release of its third-quarter 2023 earnings for October 25, 2023, after market hours. A conference call to discuss the financial results is set for the same day at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).

LendingClub is a key player in the financial sector, with a focus on digital marketplace banking.

Related Story:  The LendingClub-Radius Bank Deal Could be the Precursor to Many More

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