US lender Upstart to cut 20% of jobs in bid to return to profitability
California-based lending platform Upstart is embarking on another round of job cuts, with 365 employees, around 20% of its total staff, facing the axe.
Upstart to cut 20% of jobs
Late last year, the firm shed around 7% of its workforce, citing a “challenging economy” and a reduction in the number of loans on its platform.
Now, according to regulatory filings, Upstart intends to cut a further 20% of roles as it looks “to reduce operating costs, streamline operations and return Upstart to profitability”.
The lender is also suspending development of its small business loan product “until macroeconomic conditions improve”.
Upstart expects the reorganisation, referred to as its “January 2023 Plan”, will save the firm around $57 million in operating expenses over the next 12 months. The firm also expects to make savings of around $42 million related to stock-based compensation through 2025.
The firm says the plan will cost it somewhere in the region of $15 million as a result of severance payments, employee benefits and taxes.
The move is a response to the drop in loan originations experienced across the sector thanks to challenging macroeconomic conditions.
Job cuts have been rampant across the wider fintech industry in recent months, with crypto firm Luno, US financial services giant Capital One and digital lending platform LendingClub among some of the most recent firms to axe jobs.
