Rocket offers more voluntary buyouts
Rocket companiesthe parent company of Rocket Mortgageextended the second round of voluntary career transition offers to employees amid the company’s forecast of much lower origination volume in the third quarter.
“We recognize that options for career growth in some areas of our business are currently limited as the housing market normalizes after two years of unprecedented volume,” said Mike Malloy, Chief Administrative Officer of Rocket Central.
The buyout offer, which was extended on Friday, is an “entirely optional plan, which will apply to a small percentage of our team members,” Malloy said. The voluntary buyout follows requests from employees who are considering moving to a different industry, he added.
“Due to the current market, some team members have told us that they are considering changing roles or completely changing industries and have requested that we reinstate our Career Transition Incentive, offered for the first time. earlier this year.”
The voluntary buyout program includes “several months” of salary, “a portion” of their accrued vacation, benefits coverage through 2022, and career transition services of one-on-one career coaching, resume writing, and interviewing. job search assistance, added the leader.
The company has not commented on the size of the buyout or whether it will make any layoffs if origination volume drops more than expected in the coming months.
Prior to the first round of takeovers, the company had 26,000 employees. In April, Rocket offered buyouts to 8% of its employees in its mortgage operations and securities teams. Incentives included several months of salary, a portion of their accrued vacation time, and benefits coverage through November.
The nation’s largest lender has not been immune to mortgage rate volatility. In the second quarter, Rocket’s profit fell to $60 million, down sharply from $1 billion in the prior quarter due to a sharper-than-expected drop in buying activity.
“The net rate freeze and the volume of closed loans were lower than expected, largely due to weak buying demand driven by weaker consumer sentiment and recession fears,” said Julie Booth, chief financial officer during Rocket’s second quarter earnings call with analysts. “With respect to our expenses, we continue to apply a disciplined and prudent approach to cost management.”
The lender’s origination volume fell more than 58% in the second quarter to $34.5 billion from $53.8 billion in the prior quarter. A year ago, during the refi boom, Rocket’s lending volume was $83.7 billion, a figure no competitor came close to.
The company added new products to compensate for the lower origination volume. Earlier this month, Rocket rolled out home equity loans, targeting US homeowners with strong equity positions in their property, and loans for customers installing solar panels.
The company expects closed loan volume of between $23 billion and $28 billion in the third quarter. Rocket also expects a reduction in total spending of up to $150 million, due to July-September production and marketing costs.