By Sam Boughedda
Upstart Holdings (NASDAQ:UPST) will lay off approximately 20% of its current workforce, the company revealed in a filing Tuesday.
The number equates to around 365 employees. The company, which runs an AI lending platform, also said it will be suspending the development of its small business loan product.
The move is a result of the challenging macroeconomic conditions "where many lenders and credit investors have significantly reduced or paused loan originations," the company declared in its filing, with Upstart becoming the latest in a long line of tech firms to cut its workforce.
Upstart's January 2023 Plan is designed to reduce operating costs, streamline operations and return Upstart to profitability.
The former pandemic darling said it estimates it will incur approximately $15 million in total charges, including severance payments, employee benefits, and taxes, in connection with the plan.
It also expects to realize cash savings of approximately $57M in operating expenses over the next 12 months, with non-cash savings expected to be roughly $42M related to stock-based compensation through 2025.