A third of online lender LendingClub’s workers will be laid off, the company said on Tuesday, April 21.
That’s 460 employees, including President Steven Allocca, as the company tries to navigate the tumultuous economy surrounding the coronavirus pandemic and slash costs.
In addition, top executives will be taking salary cuts, with chief executive Scott Sanborn taking a 30 percent cut and other top officials taking 25 percent cuts.
The company had 1,538 workers as of Dec. 31, 2019.
In a regulatory finding, the company said the virus had had “unprecedented” effects on business as usual, consuming everything from small businesses to consumers and affecting everything.
The virus had the effect of reducing demand for the personal loans for investors the company specialized in, and so the cuts were necessary, the company said in the filing.
The company expects to take about $10 million in termination costs for the remainder of the year.
LendingClub’s situation is not unique; almost every sector of the workforce has seen massive job losses or furloughs. Companies are struggling to pay employees while services are shut down as people stay indoors to avoid spreading or catching the highly-contagious virus.
Recent numbers from CNBC have the total amount of Americans without jobs sitting at 14 percent, with Michigan and Pennsylvania taking it particularly hard, seeing one out of every five workers now out of a job.
Those numbers might not even be fully accurate, as many residents haven’t been able to file unemployment claims, such as in Florida where the unemployment website could only process a small fraction of the claims.
Due to the overall effects of the virus, the American and world economies could both see heavy contractions, according to Allianz chief economic advisor Mohamed El-Erian. The U.S. economy could see a shrinkage of around 10 percent, he said.
The overall unemployment rate could top 20 percent this year, erasing any progress from the time since the last recession in 2008.
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