Lending Club Will Get a New CEO and Cut 179 Jobs
Online lender Lending Club said Tuesday it would cut 12% of its workforce as loan originations decline and confirmed that Scott Sanborn would replace ousted chief executive Renaud Laplanche.
Lending Club (LC), whose shares have fallen about 40% since Laplanche’s departure, also said it expected loan originations to be roughly one-third lower in the second quarter than they were in the first quarter.
The company, which had 1,382 employees at the end of 2015, said it take a charge of $3 million in the second quarter related to the elimination of 179 jobs.
Laplanche, one of the highest-profile names in the fledgling online lending industry, was removed last month over financial irregularities at the company, which operates the world’s biggest peer-to-peer lending platform.
Sources have since told Reuters that the French entrepreneur has been speaking to private equity firms and banks about financing a potential buyout of the online lender. ‘
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The company also said on Tuesday that an internal review had found 32 loans made through its platform in the second half of December 2009 to Laplanche and three of his family members.
The loans, worth about $25,000 in revenue, were issued to push up reported platform loan volumes, Lending Club said. All the loans have been repaid, the company said.
“The company is confident that there are no other situations in which Mr. Laplanche inappropriately originated loans in his or his family’s name during periods after December 2009,” Lending Club said in a filing.
Laplanche’s exit sent shockwaves through an industry already strained by weakening investor appetite for loans, increasing defaults and the possibility of heightened regulation.
In announcing Laplanche’s departure in May, Lending Club said an internal probe had found that employees had falsified documentation when selling $22 million of loans to an investor.
Lending Club has since said that Laplanche had not disclosed his stake in a fund in which the company later made an investment.
Lending Club’s shares were up about 2% in premarket trading.
Sanborn has served as acting CEO since Laplanche’s exit. Hans Morris, who had been interim executive chairman, will take the role of chairman, the company said.