SoFi restructures digital mortgage approach, lays off staff
- SoFi isn't pulling out of the mortgage business.
- It's restructuring its workforce to outsource origination.
About 100 employees at online lending startup SoFi are going to be laid off.
SoFi isn’t exiting the online mortgage space — it has plans to dramatically expand its mortgage business in 2019. But it is moving away form directly underwriting loans.
The layoffs will result in a 7% cut to the company’s current staff of close to 1,400 employees. The personnel cuts are set solely in the company’s mortgage department.
SoFi is bleeding money: The company’s financial struggles have been well-documented this year. SoFi has lost money over the past two quarters, with losses accumulating to $12 million over the third quarter. To date the company has raised a total of $2 billion in funding and is reportedly worth over $4 billion.
Tearsheet’s Take: SoFi isn’t the only mortgage lender to experience cutbacks. Other recent staffing cuts including JPMorgan laying off 400 employees in its consumer home-lending department, and Movement Mortgage letting go of 180 employees point to layoffs across the online mortgage lending sector.
Quicken’s Rocket Mortgage, which originated $20 billion in the first quarter of 2018, is an exception in the online mortgage space where no one else has really cracked the user acquisition nut.