Ocwen Financial is in the midst of what it already said would be a tough year for the company, as the company adjusts its business structure away from such a heavy focus on mortgage servicing towards an increased focus on mortgage origination.
Earlier this year, Ocwen said that it expected to post a loss in 2016, and the company’s first quarter results backed up that statement, as the company posted a net loss of $111.2 million in the first three months of 2016.
To counteract the expected losses from the business shift, Ocwen said that it is undertaking several cost-cutting efforts throughout 2016.
Included in those cost-cutting efforts is a reduction in the company’s staff, as HousingWire can report that Ocwen recently laid off 120 employees from various office locations throughout the U.S.
The cutbacks were confirmed by Ocwen, which said in a statement that the decision to lay off the 120 employees was a “difficult” one, but one the company felt was necessary to move forward with its restructuring efforts.
“After an extensive analysis of our cost structure, we made the difficult decision to reduce staffing levels to better align the company's resources with our current strategy and market opportunities,” Ocwen said in a statement to HousingWire.
“These decisions are never easy, and it is difficult to lose colleagues who have contributed to the company’s success,” Ocwen’s statement continued. “However, it is essential to bring our costs into proper alignment in order to preserve the necessary resources to drive future growth and restore the company to profitability.”
According one of the company’s most recent filings with the Securities and Exchange Commission, the company’s total employment as of the end of 2015 was approximately 10,500 total. The company has operations in the U.S., U.S. Virgin Islands, India and the Philippines.
According to Ocwen, as of the end of 2015, approximately 6,900 of the company's employees were located in India and approximately 700 in the Philippines. And of those foreign-based employees, more than 80% were engaged in the company's servicing operations.
Based on the company's own numbers, Ocwen had 2,900 U.S.-based employees, meaning this round of cutbacks affected approximately 4% of the company's U.S. workforce.
As part of the company’s first quarter earnings announcement, Ocwen’s president and CEO, Ron Faris, said that the company is pleased with its previous cost-cutting efforts, which included the company reducing its expenses by $49.7 million from the first quarter of 2015, but knows the company has more work to do.
“We are pleased to see the progress of our ongoing cost improvement efforts. Company-wide, we saw adjusted operating expenses decline by $55 million or 17% from the prior quarter,” Faris said in April.
“We are focused on making further progress on our cost goals while continuing to enhance the borrower experience,” Faris added. “We also remain committed to investing in our lending businesses, which we believe will drive earnings growth in the future.”
[Correction: This article is updated to reflect an accurate count of Ocwen's total employment.]