Online lenders

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.
SoFi restructures digital mortgage approach, lays off staff

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.

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