LendingClub, Amid Rising Interest Rates, Cuts 225 Jobs
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LendingClub stands as a digital lending platform, and is set to lay off a total of 225 of its employees. This stands as 14% of the company’s entire workforce, with the blame being placed on the recent interest rates rising affecting the demands of loans in general.
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LendingClub Joins The job Cut Club
LendingClub is set to publish its financial results for Q4. Reuters has suggested that the company will be garnering a revenue somewhere between $260 million and $263 million. Reuters further speculated that the company might have a net income of somewhere between $21 million and $24 million for their Q4.
In a public statement about the matter, representatives of LendingClub claim these layoffs were caused by the Federal Reserve, as the agency has increased the interest rates substantially. The representatives claim that this resulted in a reduction in revenue overall.
Federal Reserve Interest Rate Hikes
The company speculated that they would manage to save around $25 million to $30 million via these job cuts. This was reported via Reuters.
Executives of LendingClub gave a statement back in October of 2022. The statement back then was already bleak, as the company’s representatives speculated that the marketplace revenues and loan volumes would be “tempered” after the Federal Reserve raised the interest ever forward.
With these layoffs, the low-cost loaning firm based in San Francisco joins a growing list of fintech firms that have issued out job cuts within the past year. These job cuts come as a global recession looms ever closer, following after Till Payments, Crypto.com, and ClearCo.
Mourning Those LendingClub Lost
Scott Sanborn stands as the CEO of LendingClub, and gave a public statement about the matter at large. He emphasized how it was no easy matter to part with workers, describing them as friends, outstanding contributors, as well as teammates. Furthermore, Sanborn told the public that the company is taking steps in order to help those that were impacted by the job cuts, citing bonuses and incentive pay. Furthermore, Sanborn highlighted that foreign nationals were made accommodations for when it comes to employment visas. This stands as some of the ongoing support that Sanborn assures the public is being given.
Thousands of jobs have been terminated in an ongoing attempt to keep expenses under control as Federal Reserve continues to raise interest rates. The Ukraine War only compounds this issue. The Q4 report for LendingClub will be published on the 25th of January, 2023.
Financially Dark Times Looming
Time will tell what the financial environment will look like in the near future. With a number of compounding economic stresses, the threat of a recession looms ever closer. Everything seems to be coming to a head, and everyone is trying their best to prepare for it.
Sadly, this comes at the cost of jobs and amenities, with no clear way of how to prevent the sacrifices every business entity makes to try and sustain itself through the trying times of today and tomorrow.
