Adding to the unemployment crisis caused by coronavirus pandemic, online lending marketplace LendingClub Corp recently announced that it would lay off 460 employees, including President Steven Allocca, as part of a restructuring plan to slash costs.
The layoffs represent roughly a third of the company’s total workforce of 1,538 people as of Dec. 31, 2019.
“COVID-19 is having an unprecedented effect on consumers, small businesses and the broader economy, including the credit markets, and has resulted in a current reduction in platform investor demand for personal loans,” the company said in a regulatory filing.
LendingClub said it expects to incur termination costs of about $10 million in the rest of the year.
The company also announced temporary salary reductions for its top executives. Chief Executive Officer Scott Sanborn will take a 30% cut to his base salary, while others will take a 25% reduction.
“It’s never easy to lose people who are not just colleagues, but teammates and friends,” CEO Scott Sanborn said in a statement. “However, it was necessary to realign our staffing to the current business environment. With these actions, we believe we are well positioned to achieve our long-term strategic goals and better serve our members,” he added.
The coronavirus pandemic has impacted several jobs globally with nearly 10 million people filing for unemployment benefits in America alone. The pandemic has forced businesses to close operations and employees have been sent on furloughs for indefinite periods. The International Labour Organization has predicted that globally around 2.5million jobs would be lost due to the pandemic.
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