Lending company Upstart Holdings Inc. will cut its staff by 20% amid “challenging” conditions, it announced Tuesday.
The move will impact about 365 employees, Upstart
disclosed in a filing with the Securities and Exchange Commission. It comes “in response to the challenging macro environment where many lenders and credit investors have significantly reduced or paused loan originations.”
Upstart expects to incur about $15 million in charges related to this restructuring plan. Additionally, the company anticipates it will see about $3 million in one-time non-cash savings “related to the reversal of previously expensed stock-based compensation associated with forfeited stock awards.”
Once the plan is implemented, Upstart expects that it will see about $57 million in cash savings on the operating-expense line over the next 12 months. It further projects that it will see roughly $42 million in non-cash savings pertaining to stock compensation through 2025.
Read: More than 75,000 tech-sector employees have lost their jobs since the start of the year
“Upstart also plans to suspend development of its small-business loan product until macroeconomic conditions improve,” the company disclosed.
Upstart announced in early November that it would be eliminating the positions of 140 hourly workers responsible for processing loan applications.
The company is one of numerous technology players laying off employees. On Tuesday alone, Workday Inc.
and NetApp Inc.
announced plans to cut staff.
See more: IBM and SAP join Spotify, Google, Intel, Microsoft, Amazon, Salesforce and other major companies laying off thousands of people
Read: NetApp to cut 8% of its 12,000-strong workforce, expects $85 million to $95 million of charges
Shares of Upstart were near flat in Tuesday morning trading. Upstart’s stock has lost more than 80% over the past 12 months, though it’s up more than 40% to start 2023.