There’s big news out of Lending Club this morning. The pioneering marketplace lender has simultaneously announced the hiring of a new CEO and the fact of 179 coming layoffs.
Well, not exactly the hiring of a new CEO – but the appointment of the interim CEO, Scott Sanborn, to the permanent head. Sanborn’s main work in the last six weeks or so has been rebuilding investor confidence after the series of explosive revelations about Lending Club’s business under the last person to hold the CEO job, Lending Club founder Renaud Laplanche.
The picture at Lending Club has been less than pretty since Laplanche’s exit. Shares are down 61 percent this year and investor interest in the platform has plummeted.
Despite the setbacks, Lending Club seems confident in its new head at the helm.
“Scott and the management team have demonstrated they can lead Lending Club through this turbulent time,” Hans Morris, who was named the company’s chairman, said in the statement. “With today’s announcements and Scott at the helm, Lending Club is now in a position to move forward.”
Apart from naming a new CEO, Lending Club has also announced its internal review is coming to completion and that said review had turned up several interesting items. The first was on the valuation of assets in six private funds, and the other was tied to loans made in 2009 to the former CEO and three of his family members.
The toll has been swift and measurable. Second-quarter loan originations are expected to be about one-third lower than the first quarter, the company said in a statement. Lending Club is set to hold an annual shareholders meeting Tuesday (July 5) after postponing the event three weeks ago.
That postponement came in the wake of the second largest investor in Lending Club stock suddenly unloading all of their shares at once. The firm needed time to prepare.
And, it should be noted, the news this a.m. is not all about a new CEO. Lending Club will also cut 179 employees to cope with that big decline in loan volume and tanking share price. Notably, Lending Club was “the future of lending” about 18 months ago and had one of the poppier IPOs of 2014.
These days between the executive shuffling, coming regulatory waves and perhaps even the Brexit, the market is a much, much tougher place to play.