(Bloomberg)—LendingClub Corp., the online-loan marketplace, plans to wind down customer support operations in its home city of San Francisco and shift staff to Utah as it seeks to trim costs.
In an internal memo to staff reviewed by Bloomberg, Chief Executive Officer Scott Sanborn said LendingClub aims to have its teams completely out of San Francisco by December.
“This is one of those messages that, while I know it’s the right thing for the company, is tough to deliver,” the memo reads. It means that “virtually all operations positions, including those supporting auto, will eventually no longer exist in San Francisco.”
About 350 jobs will shift to Lehi, Utah, where LendingClub recently opened a new office.
The retreat comes after LendingClub in February forecast slower revenue growth amid a tightening credit market. That was the latest blow for the company, whose former CEO Renaud Laplanche agreed to a three-year ban from the securities industry to resolve allegations he misused investor money.
Headroom to Grow
Sanborn said in the memo that rents in San Francisco have increased 140 percent since 2010 and are now “some of the highest in the country.”
“Growing exclusively in San Francisco simply doesn’t make financial sense. Instead, we now have plenty of headroom to grow affordably in Lehi and access a new talent base in Utah.”
By the end of the year, LendingClub expects to have reduced its footprint in the West coast city by 41 percent through lease expirations and subleasing, and anticipates occupying 70,000 square feet in Lehi, according to the memo.
There weren’t any job eliminations as part of the announcement. LendingClub, which has about 1,700 employees, plans to provide impacted teams with official notices, including separation dates, on or around July 1.
LendingClub’s New York-traded stock closed down 2.2 percent Tuesday. While the shares have gained 21 percent this year, they’re still almost 80 percent below their listing price of $15 in late 2014.
--With assistance from Felice Maranz.To contact the reporter on this story: Lily Katz in New York at [email protected] To contact the editors responsible for this story: Debarati Roy at [email protected] Katrina Nicholas, Peter Vercoe
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