Chicago-based mortgage company Guaranteed Rate has been quietly laying off employees across the country for more than a year, according to former and current Guaranteed Rate employees.
The Tribune spoke to more than a dozen current and former employees, and several told the Tribune that the layoffs have occurred in recent weeks, with entire teams wiped out. More layoffs are potentially on the horizon, and company morale is “in the toilet,” as one current employee put it.
“We have made progressive layoffs through the beginning of 2022 in an effort to right-size for the volume that exists in the industry,” said John Palmiotto, Guaranteed Rate’s head of retail production until his resignation last week. “In fairness, we probably hired more people in the years prior during COVID than most other companies. We increased the workforce substantially to meet the demands of our time,” he added, adding that the company has “probably” increased the workforce more than was required.
The layoffs come as the pandemic-era housing market is at its peak, with the average 30-year fixed loan rising to more than 7% on more than one occasion, keeping prospective sellers in their homes Is. , buyers who don’t have homes to buy and a mortgage industry that has very few loans to close.
In a statement to the Tribune, Victor Ciardelli, CEO and founder of Guaranteed Rate, acknowledged the layoffs and said it was due to two reasons: lower loan volumes due to higher mortgage rates and “right-sizing of the business and greater efficiencies”. required to make”. In an effort to streamline its processes, the company developed new technology that “dramatically reduced the people and time needed to finance the loan.”
“While these actions were difficult, they were necessary in order to continue providing consumers with a best-in-class experience in the new rate environment,” Ciardelli said.
Guaranteed Rate, whose name has graced the home of the Chicago White Sox since 2016, is the nation’s second-largest retail mortgage lender, according to Inside Mortgage Finance, a subscription-based industry news and data provider. As a retail mortgage lender, Guaranteed Rate works directly with consumers, while other mortgage lenders work through intermediaries such as real estate brokers. Some lenders use both models.
Inside Mortgage Finance found that business is down nearly 60% in terms of guaranteed rates in the first three months of this year compared to 2022, with other mortgage companies seeing similarly drastic declines.
Guaranteed Rate did not make Ciardelli available for interview, nor did the company respond to questions about how many positions have been eliminated, the processes surrounding the layoffs or the state of morale at the company.
“Unfortunately, we are unable to comment on our reduction process or how we communicated with employees,” Chief Marketing Officer Andrew Pohlman said in an email.
Pohlman declined to say how many people work at the company. The total number of employees has been reported in different parts of the company’s website as more than 9,000 to more than 15,000. Current and former employees told the Tribune in recent days that number is well below 10,000.
Palmioto, 57, said the number of layoffs is likely to be in the thousands, adding that the company had about 8,000-9,000 workers before the layoffs in 2022. Furloughs happened last year as well, Palmiotto and other employees said.
“We tried to retain as many employees as possible, hoping that business would pick up or conditions would change,” Palmiotto said. “He didn’t really improve.”
Real estate industry news outlet HousingWire first reported the August layoffs at the company last week.
According to Illinois’ Department of Commerce and Economic Opportunity, there have been no worker adjustments and retraining notification layoffs at the guaranteed rate through 2021 — the types of job cuts that the state is required to notify when mass layoffs are issued. or the plant is shut down. ,
After six years with Guaranteed Rate, Palmiotto now works at The Money Store, a subsidiary of New Jersey-based MLD Mortgage. He said he changed jobs because “I felt that by moving to a smaller organization, I would have more impact and my ability to be more involved in strategic direction and decisions.”
Palmiotto said he was one of about 10 people who reported to Ciardelli.
Khadijah Parks, 27, worked for Guaranteed Rate as a remote worker based in New Jersey before being laid off from a technology team in October 2022. He was brought on a new team during the hiring boom that helped support other mortgage companies Guaranteed Rate was acquiring and building. Now, he said, his team and other technical teams have been destroyed.
Parks worked for the company for about 11 months and was fired just before she was due a significant increase in her severance package if she completed a one-year term, he said.
“It was terrible,” said Parks, who returned from vacation the day of her layoff. “He had the courage to say that I can do the work I am doing without any hesitation.”
Parks remains unemployed.
Current and former employees, including Parks, said there was a lack of communication from upper management regarding the layoffs.
Palmioto said he didn’t know why the messaging wasn’t better, but conversations around it kept happening. He also said that he was not aware of what his morale would be like, as he was a remote worker who did not live in Chicago.
“I feel like everyone handled it in the best possible way,” Palmiotto said, adding that he didn’t think the layoffs could have been prevented and that the layoffs were not unique to Guaranteed Rate.
Other mortgage companies including Rocket Mortgage, United Wholesale Mortgage and Better.com have also faced layoffs and buyouts due to the housing market downturn.
Mindy Marchetti, 47, was a manager on the technology team at Parks Like Guaranteed Rate. He started as a remote worker in August 2021 and voluntarily left the company in March this year after seeing layoffs.
“When I was hired, we were booming mortgages, so things were amazing. We had all kinds of resources, and company morale was excellent…” Marchetti said. “As rates started going up, the layoffs started coming. And I’m a single mom, and I wanted to make sure I had some stability in my career, so I decided to look elsewhere.
Marchetti said Ciardelli and Guaranteed Rate’s COO Nick Athanasiou mentioned the need for layoffs due to the declining market on some weekly calls with team managers and loan officers.
By the time of his departure, Marchetti stated that layoffs were occurring every two weeks, his team’s resources were dwindling, morale was “very low” and there was a sense of “instability”.
“It felt like the next number might be calling your number,” Marchetti said.