Blend Labs Lays Off 10% Of Its Workforce
Mortgage technology firm cites rising rates, falling refinance applications for cuts.
Blend Labs Inc., a mortgage technology company based in San Francisco, laid off 10% of its workforce this week, citing efforts to “improve cost efficiency and better align its operating structure with its business activities.”
In a filing with the Securities & Exchange Commission (SEC), the company said it planned to eliminate “approximately 200 positions across the company, or approximately 10%” of its current workforce.
Blend estimated it would incur approximately $6.7 million in charges related to the layoffs, including approximately $6.5 million “in cash expenditures for employee benefits, severance payments, payroll taxes, and related facilitation costs.” The remaining $200,000 would be incurred “in stock-based compensation,” it said.
Blend also told the SEC that it expects the layoffs to be substantially completed in the second quarter of 2022.
“The eliminated positions represent annualized compensation expense of approximately $35.4 million,” the company said in its filing. “In addition to the elimination of certain positions, the company is implementing non-personnel related cost reductions.”
Nima Ghamsari, founder and chief executive officer of Blend, posted comments about the layoff decision to the company’s blog.
“Some of our operational businesses, such as our title insurance agency in particular, are seeing the negative impact of higher rates and reduced refinance activity,” he wrote in the statement posted Monday. “As a result, we made the difficult decision to lay off about 10% of our employees. Making these decisions is never easy, but we are committed to making our employees’ transition as smooth as possible.”
Ghamsari said every employee affected by the layoff will be eligible for at least 18 weeks of pay and continued health insurance, as well as “vesting of any previously granted equity into June, and 12 weeks of outplacement services.”
He added, “Most of the decisions we made were a function of changes in refinance volumes. With lower volumes, we need fewer people to execute and support those businesses. However, we are committed to continuing to serve you in the way you have come to expect from Blend. In fact, we believe that our renewed focus on the technology that makes Blend special will make us an even more valued partner to you.”
On its website, Blend states that it processed nearly $1.4 trillion in loan volume in 2020, with more than 330 customers using its platform.
According to Yahoofinance.com, Blend Labs Inc. provides cloud-based software platform solutions for financial services firms in the United States. It operates in two segments, Blend Platform and Title365.
Founded in 2012, Blend offers products for mortgages, home equity loans and lines of credit, vehicle loans, personal loans, credit cards, and deposit accounts, yahoofinance said. It also provides mortgage products for consumers, including close, income verification for mortgage, homeowners insurance, and realty, as well as title search procedures for title insurance policies, escrow, and other closing and settlement services. It serves banks, credit unions, financial technology companies, and non-bank mortgage lenders.