Doma Holdings Inc., a title insurance company based in San Francisco, plans to cut about 40% of its staff, according to a Securities and Exchange Commission (SEC) filing.
In a notice dated Dec. 2 and filed Tuesday with the SEC, Doma states that it “committed to implementing a strategic initiative and corresponding reduction in workforce” that includes eliminating about 515 positions companywide, or about 40% of its workforce.
According to its website, Doma has more than 100 offices in 39 states and the District of Columbia and has more than 1,000 employees. At 40%, the 515 positions would mean the company employs about 1,288 people.
Doma states in its filing that the cuts are intended to generate estimated annualized savings of between $85 million to $90 million in compensation expenses, as well as “additional long-term facility related expense savings, beginning in the first quarter of 2023.”
It expects to incur between $9 million and $10 million in employment-related charges, “including cash expenditures for employee benefits, salary continuation, severance payments, payroll taxes, and related costs offset by forfeitures of bonus and stock-based compensation.”
In addition, Doma said that, in the fourth quarter of 2022 and first quarter of 2023, it expects to incur restructuring charges “related to decisions to exit or cease use of certain leased facilities to align with the company’s anticipated operating needs.” It added it could not “reasonably estimate these facility restructuring charges at this time.”
While Doma is conducting a mass layoff, it has not filed a notice with the state of California under the Worker Adjustment and Retraining Notification (WARN) act. Federal law requires a company to provide employees at least 60 days advance notice of a shutdown or mass layoff. A spokesperson for the Employment Development Department (EDD) in California said it had not received a WARN Act notice from Doma Holdings Inc.
In response to a request for comment from NMP, a spokesperson for Doma provided a statement on behalf of the company.
“On Dec. 6, 2022, Doma filed a Form 8-K with the SEC that included information about a reduction in workforce of approximately 515 positions,” the statement begins. “Any decision to part with even a single teammate is a difficult one, and this was no exception. It was a tough day, and Doma is extremely sensitive to those impacted.”
The statement did not include responses to questions about what severance employees would receive or whether there is a specific timetable for the layoffs. It only said, “For the most part, Doma expects these changes to be completed in the first quarter of 2023.”
The statement concluded by adding, “This reduction in workforce, along with corresponding long-term facility related cost savings, are aligned with Doma’s accelerated profitability objective.”
Last month, Doma reported a net loss of $84.1 million, or 26 cents per diluted share, for the third quarter of 2022, 43% more than the $58.7 million loss, or 18 cents per diluted share, it reported for the second quarter.
In its third-quarter earnings report, Doma said its financial performance was “challenged by the cumulative effect of four consecutive 75-basis-point rate hikes this year, high inflation, broken global supply chains, and broader geopolitical concerns, which have all contributed to the near doubling of 30-year fixed mortgage rates versus this time last year.”
Founder and CEO Max Simkoff is quoted in the report, stating, “It is more important now than it ever has been to continue to deliver on our mission and to do so at scale, which is why we are committed to achieving adjusted EBITDA profitability sooner than the late 2023 timeline."
Doma Chief Financial Officer Mike Smith added that “Given our laser focus on profitability, we will continue to prioritize investments in areas that we believe will drive the most long-term value for all our stakeholders, while ensuring those investments have a focus on profitability and cash generation over growth."
In addition to the reduction in force, the SEC filing also noted that Simkoff voluntarily agreed to cancel receiving 701,010 performance-restricted stock units for his performance from Jan. 1, 2021, through Dec. 31, 2023. The stock was to be awarded to him under a company incentive plan filed on Oct. 5, 2021, the filing states.
Doma Holdings Inc. was founded by Simkoff in 2016 as States Title. In addition to Doma, it includes a family of brands — States Title, North American Title Co. (NATC) and North American Title Insurance Co. (NATIC). It originates, underwrites, and provides title, escrow, and settlement services to homeowners, lenders, title agents, and real estate professionals.
