LendingClub is cutting roughly a third of its staff as the Covid-19 slowdown dampens demand for consumer loans.
The company, which pioneered online personal loans, said in a regulatory filing Tuesday that it would lay off 460 people -- or about 30% of its workforce.
LendingClub CEO Scott Sanborn said the virus outbreak was having an "unprecedented effect" on consumers and small businesses, resulting in a drop in demand for personal loans. The move was necessary to "realign" staffing with the current business environment, he said.
"With these actions, we believe we are well positioned to achieve our long-term strategic goals and better serve our members, who will need us more than ever, once the economy stabilizes," Sanborn said in a statement.
The company also said it was reducing executives' salaries by 25%. Sanborn, meanwhile, will take a 30% pay cut.
LendingClub calls itself the biggest U.S. provider of personal loans, and had been part of the wave of tech-focused firms getting in on marketplace lending. The company had the biggest domestic tech IPO of 2014. But two years, the company was dealt a blow when LendingClub's founder was ousted amid irregularities with loan practices.
It's now one of many fintech loan providers feeling the effects of the recent small business slowdown. Fellow online lender Kabbage furloughed workers in late March, according to TechCrunch. Unlike some of its peers, Lending Club did not apply to be a lender for the U.S. governments Paycheck Protection Program. It is however, facilitating loans to Opportunity Fund and Funding Circle, who are funding the government-backed loans.
In February, LendingClub became the first U.S. fintech company to acquire a bank. The company said it was buying Boston-based, Radius Bancorp for $185 million to give it access a stable and cheaper source of funding.
Shares of the Lending Club were down 4% in regular trading Tuesday, and have fallen more than 40% this year.