LoanDepot to cut 2,000 more jobs this year as decline in mortgage originations seen accelerating

Shares of LoanDepot Inc.
LDI,
-12.05%
rallied 4.1% in premarket trading Tuesday, after the online mortgage company said it was moving to “aggressively rightsize” its cost structure as mortgage originations have contracted “sharply and abruptly” in 2022. The company said it is implementing a program to generate annualized savings of $375 million to $400 million by the end of 2022, through job cuts, attrition, business process optimization, reduced marketing and real estate consolidation. The company, which had 11,300 employees at the end of 2021, has already cut 2,800 jobs this year, and expects to cut another 2,000 jobs to end 2022 with about 6,500 employees. “We anticipate continued challenging market conditions, with mortgage originations projected to decline by roughly half in 2022 from 2021, including an accelerated decline in the second half of 2022, followed by a further decline in 2023,” said Chief Financial Officer Patrick Flanagan. The stock has plunged 56.7% over the past three months through Monday, while the S&P 500
SPX,
-1.15%
has shed 12.4%.