There is nothing worse then being laid off, I know personally. I also know there is nothing worse then having to lay people off. What I don’t know first hand is having to go through either of these two scenarios right before Christmas.
Unfortunately, Tree.com employees, approximately 70 or so , were laid off today and know that there is nothing worse then being laid off right before Christmas. First, I hope the best for these people and hope that this turns into a blessing rather then a curse.
This recent cut was a dramatic move by management and coupling it with the recent pricing model change only leads me to speculate that LendingTree is still struggling in the mortgage space. I can’t imagine that this statement is completely shocking to anyone, however based on what other mortgage lead gen companies have discussed with me and the gradual recovery they are currently claiming, it is slightly surprising. I have to further speculate that the change from the closed loan fees to the more traditional upfront CPL fee, that are in most cases higher then their competitors CPL fees, is going to stifle new sales and make a recovery difficult. As I mentioned in a past post, lenders are looking to mitigate their risks and one very attractive way of doing so was by paying a smaller up front lead price and a significant closed loan fee. Even then, and frankly is probably why LT went to the up front fee, lenders struggled to close enough loans to back out an appropriate cost per loan. Additionally, there are fewer lenders in the industry which does not help the recovery.
2010 is going to be interesting for Tree.com. I don’t suspect Lebda is going to simply lay down. Remember he has got his own money on the line now. As evidence, he is already making the tough changes at the toughest times with today’s cuts.
I wish all of those people who are left without a job the best and hope for a quick rebound.