LoanDepot To Fire Another 2,000 Workers As Mortgage Market Implodes
It's only appropriate that one day after we reported that the "Housing Market Craters As Sales Get Canceled At The Highest Rate On Record" that the Biden housing crash claimed its latest victim, or rather 2,000 victims, as mortgage lender LoanDepot announced it would would fire another 2,000 staff by the end of the year as the company downsizes “to align with rapidly changing market conditions.” The latest round of layoffs is part of the company's plan to reduce staff to 6,500 by the end of 2022.
The company, which had 11,300 employees at the end of 2021, has already cut 2,800 jobs this year, and expects to cut another 2,000 jobs to end 2022 with about 6,500 employees.
“We anticipate continued challenging market conditions, with mortgage originations projected to decline by roughly half in 2022 from 2021, including an accelerated decline in the second half of 2022, followed by a further decline in 2023,” said Chief Financial Officer Patrick.
The company is targeting about $375 million to $400 million in annualized cost reductions by the end of this year through actions that include:
- Headcount reduction
- Reduced marketing and third-party spending
- Real estate consolidation
As part of the mass layoff, LoanDepot expects to incur additional non-operating expenses during the second half of 2022 including:
- Severance and benefits-related charges of $25 million to $28 million
- Charges related to the exit of real estate between about $2.5 million to $3.5 million
- Outside service costs of $7 million to $9 million
For Q2, the company recorded a non-cash impairment charge of $42 million, and while it continues to target a return to run-rate operating profitability exiting 2022, we wouldn't hold our breath.
The stock rose 4% in premarket trading but considering the company has lost about 95% from its February 2021 high...
... that will probably not make too many shareholders happy.