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LendingClub cuts 460 jobs as Covid-19 hits loan demand

LendingClub cuts 460 jobs as Covid-19 hits loan demand

P2P pioneer LendingClub is cutting around 30% of its workforce - 460 people - as it struggles with the "unprecedented effect" the Covid-19 pandemic is having on loan demand.

The company's president, Steven Allocca, is among those leaving the firm, while CEO Scott Sanborn will take a 30% cut to his base salary.

Says LendingClub in a regulatory filing: "Covid-19 is having an unprecedented effect on consumers, small businesses and the broader economy, including the credit markets, and has resulted in a current reduction in platform investor demand for personal loans."

In response, cost-cutting measures are being taken, most notably the 460 job losses, "to better reflect current loan volume and better position the Company for profitability to achieve its strategic goals when the economy and business stabilises".

The alternative lending sector is being particularly hard hit by the pandemic. Yesterday, Fitch Ratings warned that non-bank lenders in Europe would see their liquidity severely affected by the crisis while a report from European Startups highlighted the sector as vulnerable.

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