A digital mortgage firm has cut another sizable chunk of its workers in its second major round of layoffs this year.
The company said it expects to save $60 million annually after the two rounds of layoffs, though the impact won’t be felt until next year.
“We’re operating the company prudently as if the mortgage industry origination volumes will remain at or near historic low levels through 2025,” CEO Nima Ghamsari said this week in an earnings call.
The latest layoffs come as the California-based company reported a massive loss in the second quarter. After posting a $73.5 million loss in the first quarter, Blend upped that to a $478.4 million loss in the second quarter. The loss was largely attributed to a $392 million impairment stemming from an update to the value of Title365, acquired last year.
Blend reported $31.9 million in revenue during the second quarter, down from $38.7 million in the previous quarter. To generate more revenue, the company said it plans on prioritizing products with a quicker return on investment and raising prices per transaction.
The digital lending platform was founded in 2012 and went public last July, sporting a valuation of $4 billion. But the company hasn’t been immune to the mortgage market downturn spurred on by rising rates.
Applications for home loans last week fell another 2 percent from the previous week, bringing demand to its lowest level since 2000, according to the Mortgage Bankers Association. Rates were sent upwards in recent months after the Federal Reserve raised interest rates in an effort to slow down inflation.
Mortgage companies have been bearing the brunt of the destruction brought on by the reduction in demand. Sprout Mortgage went out of business, costing more than 300 employees their jobs. Texas-based First Guaranty Mortgage essentially shut down.
Other companies have significantly reduced their mortgage arms, with cuts from firms including JPMorgan Chase, Wells Fargo, Mr. Cooper, Tomo, Homelight, Keller Williams, Movement Mortgage and Better.com.
— Holden Walter-Warner