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New Residential makes another round of layoffs

Workers on the origination side – including processing, underwriting, and closing – were the main target a round last week

Lender and servicer New Residential Investment Corp. laid off originations staffers last week, sources told HousingWire. The lender has made several rounds of cuts since February.

Employees in processing, underwriting, and closing jobs were the main targets in the last week’s layoff round, according to multiple interviews with former employees. 

The latest layoff affected employees in both junior and senior roles. The company is paying two weeks of severance per year of service, a former employee said. 

New Residential, the parent company of NewRez and Caliber Home Loans, declined to comment about the layoffs.

“It came unexpectedly,” said a former employee who requested anonymity. “On Wednesday, we got called into a Teams meeting, and they turned off the comments, so we could not even ask any questions.”

In his division of about 40, about half the employees were let go, he said. 

In February, New Residential sent pink slips to 386 employees, about 3% of the mortgage workforce, less than a year after acquiring Caliber Home Loans, a multichannel lender, in a deal valued at $1.675 billion in April 2021.

News of the layoffs comes about six months after Sanjiv Das announced his resignation as CEO of Caliber. “As we continue to create synergies between companies, we are creating a structure to streamline business channels and create long-term growth,” a New Residential spokesperson wrote to HousingWire at that time.

There were multiple rounds of layoffs in originations at the end of February, March, April and May, affecting both Newrez and Caliber teams, former employees said.

Documents filed with the Securities and Exchange Commission (SEC) show that New Residential had 12,293 employees in December 2021, and 11,324 in March 2022. 

The company funded $26.9 billion in mortgages in the first quarter, down from $82.3 million in the previous quarter. But New Residential reported $690 million in net income, a 267% increase from the previous quarter, boosted by the servicing portfolio. 

To reduce costs, New Residential announced in June that it had decided to internalize the company’s management. Michael Nierenberg will continue to be the chairman of the board, chief executive officer, and president. The internalization will save approximately $60 million to $65 million. 

The company is also changing its name to Rithm Capital, reflecting the diversification of its businesses as more than just a mortgage real estate investment trust. Last year, it closed the acquisition of Caliber Home Loans and Genesis Capital LLC.

New Residential will start trading on the NYSE as “RITM” on or about August 1, 2022.

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