Upstart is laying off 365 employees due to reduced demand for lending.
The artificial intelligence (AI) lending platform said in a Tuesday (Jan. 31) filing with the Securities and Exchange Commission (SEC) that the cuts will amount to about 20% of its current workforce.
This news comes about three months after Upstart eliminated 140 positions — or about 7% of its staff at the time — due to a challenging economy that is in turn reducing loan volumes.
Many lenders and credit investors have significantly reduced or paused lending, making the situation more difficult.
Upstart Holdings’ January 2023 plan aims to reduce operating costs, streamline operations and return the company to profitability.
The plan calls for reducing Upstart Holdings’ current workforce by about 20 percent, or about 365 employees. The company estimates total costs associated with the plan to be approximately $15 million.
Upstart Holdings expects to incur these costs in the form of future cash expenditures related to severance, employee benefits and taxes.
Upstart is a technology-driven lending platform that offers personal loans to consumers with no hidden fees or prepayment penalties. The company uses advanced algorithms and machine learning techniques to evaluate creditworthiness and provide loan offers in minutes, rather than days or weeks. Upstart offers loans for a range of purposes, including debt consolidation, home improvement, and emergency expenses, with loan amounts ranging from $1,000 to $50,000 and terms of 36 or 60 months.