LendingClub, a leading financial services company, has revealed plans to reduce its workforce by 14% in response to expected challenges in the upcoming quarter. The decision comes as the company anticipates a significant drop in revenue due to adverse macroeconomic conditions and higher interest rates.
The cost-cutting measures introduced by LendingClub will impact a total of 172 employees and are projected to result in annual savings of approximately $30 million to $35 million. These savings will be achieved through lower compensation and benefits costs.
Despite the current circumstances, Chief Executive Scott Sanborn remains optimistic about the future, stating, “Longer term, we expect marketplace revenue to rebound as we capture the historically large credit card debt refinancing opportunity.”
LendingClub’s latest financial outlook suggests a decline in revenue for the third quarter. The company predicts revenue of $198 million to $200 million, significantly lower than the reported revenue of $304.9 million during the same period last year. Additionally, LendingClub expects third-quarter net income to be between $4 million and $5 million, a substantial decrease compared to the previous year’s profit of $43.2 million.
LendingClub’s restructuring efforts reflect their commitment to navigating the current economic challenges while positioning themselves for future growth and profitability.