In a rather vague headline, digital bank and online lender LendingClub (NYSE:LC) says it is aligning its cost structure to the evolving macroeconomic environment.
Scott Sanborn, LendingClub CEO, issued the following statement:
“We continue to proactively implement various measures to navigate the persistent and ongoing macroeconomic headwinds and the resulting pressure in our marketplace, primarily driven by higher interest rates. To that end, we have made the very difficult decision to streamline our workforce. Longer term, we expect marketplace revenue to rebound as we capture the historically large credit card debt refinancing opportunity.”
LendingClub said it was letting go 172 employees or approximately 14% of its staff. The cost reduction is expected to save the Fintech from $30 to $35 million when compared to Q2 of 2023.
LendingClube also released preliminary results, with Q3 revenue coming in at $198 to $200 million and net income of $5 to $5 million. Loan originations during the quarter were around $1.5 billion.
LendingClub will report earnings for Q3 on Wednesday, October 25, 2023, with a conference scheduled for 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).
Shares in LendingClub are currently trading around all-time lows. While the migration to a chartered digital bank has been deemed successful, LendingClub has yet to drive material revenue or growth sufficient to excite Wall Street.
