For the second time in six weeks, the online lender Avant is taking steps to reduce the size of its workforce.
The Chicago firm said Friday that it is offering voluntary severance packages to its 760 employees. Avant expects the staff cuts to be roughly proportional to a projected 40% decline in loan volume this year, according to a company spokeswoman.
The cost-cutting move comes during a sharp contraction in the online consumer lending sector. Two other digital lenders,
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One of the country's largest online lenders is cutting jobs and shelving expansion plans in response to investors' rapid retreat from the beleaguered sector.
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The bank says the partnership will improve the online experience for borrowers. It is just the latest example of banks and online lenders teaming up to speed up decision-making and win over new customers.
April 7 -
The former head of the FDIC has a longstanding interest in small-dollar consumer lending.
April 1
In a statement, Avant connected the severance offer to its decision to moderate the company's loan volume, in order to focus on the immediate profitability of its core business.
"We believe Avant is well-positioned to emerge as the leader in the online lending industry over the long term, but recognize there will be challenges ahead," the firm stated.
Back in May, Avant
The privately held company, which specializes in installment loans to consumers with subprime credit scores, said Friday that it has more than $175 million in cash on hand, plus an additional $500 million that can be accessed through credit arrangements.
Since the company was founded less than four years ago, Avant has originated more than $3 billion in loans in the United States, Canada and the United Kingdom.
