Lending Club cuts 179 jobs, promotes interim CEO Scott Sanborn to permanent chief
SAN FRANCISCO — Embattled online loan marketplace Lending Club on Tuesday named a new chief executive and said it will cut 12 percent of its workforce as it deals with the continued fallout from May's forced resignation of ex-CEO Renaud Laplanche.
Context & Ripple Effects
This closes out a two-month governance crisis: Lending Club spent May dealing with the fallout from Renaud Laplanche's forced resignation over loans sold to insiders, and interim chief Scott Sanborn now gets the job permanently alongside a 179-person, 12% workforce reduction. The move lands mid-retreat across marketplace lending — Prosper had just cut 28% of its staff in a 171-job reduction as volumes fell, and Avant shelved its credit card and Australia plans days later.
First-order effects
- Sanborn inherits a company shrinking to match demand: 179 employees leave immediately, and his mandate is cost discipline rather than growth, mirroring the retrenchment underway at Prosper and Avant.
Second-order effects
- The cuts did not stop the bleeding — by August Lending Club posted an $81.4M quarterly net loss and CFO Carrie Dolan stepped down, forcing deeper restructuring on top of today's layoffs.
Third-order effects
- The retrenchment became permanent: four years later Lending Club was still cutting, laying off 460 people (~30% of staff) in the pandemic downturn ([[a:952922]]), and ultimately bought a bank outright — signaling that pure online loan marketplaces without balance sheets struggled to sustain themselves.
The trend: Marketplace lenders are trading growth-at-all-costs for survival economics, with the sector's first wave of layoffs in 2016 foreshadowing consolidation around institutions that own their funding.