has joined the ever-expanding list of companies announcing job cuts. The artificial-intelligence lending company said it’s slashing its workforce by about 20%, or 365 employees, according to a Securities and Exchange Commission filing Tuesday.
Upstart (ticker: UPST) said the cuts were made “in response to the challenging macro environment where many lenders and credit investors have significantly reduced or paused loan originations.” The job cuts are also part of its reorganization initiative coined “the January 2023 Plan” intended to lower operating costs, improve operations, and return the company to profitability.
The company has struggled as of late. In November, it posted a loss from operations of $58.1 million for its third-quarter, a sharp decline from net income of $28.6 million a year earlier.
In the filing Tuesday, the company said it anticipates about $15 million in total charges related to the January 2023 Plan—including severance payments, employee benefits, and taxes. It also expects about $3 million of one-time non-cash savings related to stock award reversals. The company expects a majority of the charges and cash expenditures involved with the plan to be in process or finished in the quarter ending March 31, 2023.
Once the Plan has been rolled out entirely, the company expects to save about $57 million in cash operating expenses over the next year—savings mainly derived from employee compensation and benefits—and another $42 million in non-cash savings from stock-based compensation through 2025.
The company “also plans to suspend development of its small business loan product until macroeconomic conditions improve.”
Upstart’s announcement aligns with other similar ones on Tuesday.
(WDAY) said “a realignment of resources” will impact about 3% of its global workforce.
(NTAP) said it will slash its workforce by about 8%.
(HUBS) announced job cuts of 7%.
Upstart will report fourth quarter and fiscal year 2022 results on Feb. 14 after the market closes. Shares of Upstart slid 0.9%, to $18.58 on Tuesday, while the
is up 0.8%. Over the last 12 months, Upstart stock has sunk about 83%.
Write to Emily Dattilo at email@example.com