Doma executed its third — and largest — wave of layoffs in seven months, this time shedding 515 employees.
The digital title insurance provider cut 40 percent of its remaining workforce, according to SEC filings submitted Tuesday. CEO Max Simkoff said in an email to employees obtained by The Real Deal the layoffs mark a “substantial shift” in the company’s strategy.
“We’ll be leaning into our core data science-led differentiator of instant title and seeking ways we can expand its use through new channels and partnerships,” Simkoff wrote. “Additionally, we’ll be investing more in our underwriting offerings and continuing to deliver value to independent title agents.”
The company said it expects the changes to be completed in the first quarter of 2023.
“This reduction in workforce, along with corresponding long-term facility related cost savings, are aligned with Doma’s accelerated profitability objective,” the company said in a statement.
The company announced with its layoffs in August that it planned to focus on purchase mortgages, but a person familiar with Wednesday’s announcement said the company appears to be winding down that part of its business.
The firm has now laid off more than 1,000 employees since it undertook an initial round of layoffs in May, which affected 310 workers, and a second in August, laying off 250.
The latest cuts are expected to save the company between $85 million and $90 million, according to the filings. The company expects to incur between $9 million and $10 million in restructuring costs as a result of the layoffs.
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It will incur additional costs as it seeks to reduce its office footprint, but said in the filings it “cannot reasonably estimate these facility restructuring charges at this time.”
Doma did not immediately respond to a request for comment.
The startup, founded in 2016 to streamline the title insurance process through machine learning, is among the brokerage, proptech and mortgage firms waylaid by surging mortgage rates and the cooling market.
As the housing market came crashing back to Earth from a historically hot 2021, it hit the mortgage industry particularly hard, setting off more than 4,000 layoffs by early July alongside a 20-year low in demand for loans.
Doma posted a net loss of $84 million in the third quarter, up from $58.6 million in the second quarter. It lost nearly $200 million for the year, through the end of the third quarter.
Despite the losses of financial and human capital, Simkoff said in a third quarter earnings statement that the company will achieve adjusted EBITDA profitability “sooner than the late 2023 timeline which we had previously communicated.”