Mortgage fintech Tomo cuts nearly a third of its workforce
Lending fintech Tomo Networks cut nearly a third of its workforce on Tuesday and will reverse its expansion plans, the company confirmed on Wednesday.
The Stamford, Connecticut-based company laid off 44 employees ahead of a chaotic economic cycle, it said in a statement. It’s the latest mortgage fintech make layoffs and most recent lender to cite rising interest rates and reduced volume for downsizing.
“Although we did not explicitly offer mortgage refinancing due to the risky boom and bust cycle, we were still impacted by rapidly rising interest rates which reduced mortgage purchase margins” , said CEO and co-founder Greg Schwartz in a LinkedIn post on Tuesday. “Venture capital is also shrinking in this chaotic economic environment, so we need to craft a stable budget that will rely on less capital for longer.”
The lender now has 110 employees and plans no more layoffs, he said. Just Tomo raised $40 million in a Series A funding round in March and recently touted a $640 million valuation.
Carey Armstrong and Schwartz, former Zillow executives, founded Tomo in 2020 and raised $70 million in seed funding last june. The company also immediately committed to refrain from refinancing during their recent peak in popularity. Tomo claims to close 98% of its loans on time and serves nine states. It also added jumbo loans in January, a popular product amid rising rates and home values.
The company joins the growing list of mortgage companies large and small that have made job cuts since the start of the year. Digital lender better.com and mortgage technology company Mixed have laid off workers in the past two months as massive players Cos rocket. and Wells Fargo also laid off mortgage employees.