LendingTree laid off about 440 workers Friday as a cost-cutting response to falling revenue and loan production.
The layoffs took place at the company’s headquarters in Charlotte, N.C., and at offices in Jacksonville, Fla., and Irvine, Calif. The company did not provide a breakdown of how many positions were eliminated in each city, but said the cuts affected 20 percent of LendingTree’s 2,200 workers and were distributed across the company and across functions
LendingTree provides loans to consumers online through third-party exchange lenders, and also makes loans itself through LendingTree Loans.
According to the latest quarterly report by LendingTree’s parent company, IAC/InteractiveCorp, the dollar value of loans closed by LendingTree’s exchange lenders and LendingTree Loans fell 9 percent during the first quarter from the year before, to $7.4 billion.
Revenue for the quarter was down 12 percent from last year to $100 million because fewer loans were sold into the secondary market and fewer loans closed at the exchange, IAC/InteractiveCorp reported in a Securities and Exchange Commission filing.
“There has been significant lender pullback or outright exit from certain segments of the mortgage lending market, particularly from the highest-margin products,” the company reported. “As a result, LendingTree’s business, at both the exchange and at LendingTree Loans, is currently focused on conforming loan products, which are the most competitive from a lender’s perspective and hence the lowest margin for LendingTree.”
IAC/InteractiveCorp assured investors that the company is “focusing on cost reductions in this business to bring costs in line with the current market.”
A spokeswoman for the company, Rebecca Anderson, told Inman News that loan-request volume was up 17 percent in the first quarter compared to last year, but “problems in the subprime market are causing spillover effects,” including reduced margins on loans and fewer orders transmitted to exchange lenders.
The growth in loan-request volume is “a strong indication our brand is strong,” and that the layoffs were intended to ensure the company remains a “sustainable, growing business.”
“As we bring our costs in line, the fact that we have such a great brand and high-quality lead volume makes us optimistic that we can continue to grow our market share,” Anderson said.
In a separate announcement, IAC said today that former Wachovia Mortgage Corp. chief executive officer C.D. Davies will take over the top position at LendingTree, and that the company’s chief marketing officer, Bob Harris, has been named chief operating officer.
Davies succeeds Tom Reddin, who announced his retirement last month, as chief executive officer. During Davies’ tenure as Wachovia’s CEO, the company improved its ranking from 24th to 10th largest mortgage provider, IAC said.
Harris left Coca-Cola Co. seven years ago to become LendingTree’s vice president of marketing, and was appointed chief marketing officer in 2004.
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