San Francisco-based Blend Labs will sharply reduce its workforce and make changes to its leadership as it seeks to achieve profitability, the company announced on Tuesday.
Amid a rapidly shrinking mortgage market, the company reported a loss of $133.98 million in the third quarter of 2022. It resulted from a big decline in mortgage banking, title insurance revenues and an impairment related to the Title365 segment.
Nima Ghamsari, head of Blend, said the company has undertaken a plan to align its cost structure, innovation spend and go-to-market focus to the market reality and customers demand. “A key step in that effort is the significant reduction in our overall expenses,” Ghamsari said in a statement.
In another round of layoffs, Blend is reducing its U.S. workforce by 28%, including research and development, sales, marketing, general and administrative functions. Blend Title employees are also included in the layoffs.
The expectation is that the roughly 340 jobs cut, among other initiatives, will save over $100 million in annualized cost of revenues and operating expenses.
In operations, Amir Jafari will assume a new position created of head of finance and administration, overseeing areas like finance, people and legal. In an 8K filed with the Securities and Exchange Commission, Blend said Jafari will receive a base salary of $400,000 with up to $200,000 in potential bonuses per year. He’ll also receive a $1 million signing bonus.
The head of finance Marc Greenberg and the head of legal, compliance, and risk Crystal Sumner will depart Blend in the first quarter. Winnie Ling will replace Sumner.
Regarding its products, Blend wants to advance its transition from a multiple point-solution model to a platform business.
The company said it is allocating “an increased portion of operating expenses” into the software Blend Builder. The platform carries a subscription fee on top of “success based” transaction fees.
“This platform is already the foundation of Blend’s non-mortgage offerings, and over time will give mortgage lenders the flexibility and power they need to differentiate from their competitors.”