Ditech employees in Earth City, Missouri are not completely at a loss despite reports indicating 103 employees at the location would be cut.

But what's really happening?

The St. Louis Post-Dispatch reported that Ditech Financial is ceasing its collections operations in Earth City and laying off 103 employees. 

But the mortgage lender and servicer clarified to HousingWire the details behind its WARN notice, which made the layoffs public. 

The main announcement is that Ditech is converting its operations in Earth City, Missouri from a servicing site to an originations site in response to high customer demand for loans

Due to the transition, all employees (103) were offered continued employment in the originations business. The company said it anticipates a significant number of those employees to accept their offers.

Plus, it will pay for training and licensing expenses for employees who accept its offer.

However, their acceptance is not guaranteed. Cue the WARN notice.

The WARN Act, while designed with good intention to protect employees who get laid off, was filed in an ‘abundance of caution,’ Ditech said.

The WARN Act generally requires at least 60 days advance notice to employees and government officials of a layoff impacting 50 or more employees at a single site of employment.

“As we were uncertain how many employees would ultimately accept our offer to transition to the new originations positions, and therefore whether the WARN Act would actually be triggered, Ditech issued the WARN notices out of an abundance of caution,” the company said.

And what’s more, Ditech said it also plans to expand staffing at the Earth City location with external hires from the St. Louis market.

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