Blend Labs announces new initiatives, will cut 28% of onshore employee base

Blend announced series of specific initiatives that support its previously communicated plan to accelerate its path to profitability. The initiatives announced today aim to right-size the Company’s cost structure, focus its investments on the highest potential growth opportunities, and realign its leadership to drive the Company’s transition from a product company to a platform company. Specifically, they include: A 28% reduction in Blend’s onshore employee base impacting Blend Title and corporate operations in R&D, sales and marketing and general and administrative functions. This latest reduction in force and prior savings initiatives are expected to reduce Blend’s annualized cost of revenue and operating expenses by over $100 million in the aggregate on a non-GAAP basis exiting calendar 2023 relative to the third quarter of 2022; Implementation of planned enhancements to Blend’s go-to-market and investment strategies designed to enhance the Company’s product suite, revenue models and gross margins, including: Allocating an increased portion of operating expenses into Blend Builder, the Company’s configurable software platform, which carries a subscription fee on top of success based transaction fees. This platform is already the foundation of Blend’s non-mortgage offerings, and over time will give mortgage lenders the flexibility and power they need to differentiate from their competitors; d for Blend’s large mortgage customer base, focusing on helping lenders be even more efficient by implementing the large backlog of features built over the past several years, including Loan Officer Toolkit, Self-serve Prequalification, Blend Income, and Blend Close; The appointment of Amir Jafari as Head of Finance & Administration, a new position that will oversee Finance, People Operations, Legal, Compliance, IT and Information Security. As part of this transition, Blend President Tim Mayopoulos will leave his management role in the first quarter, while remaining a member of the Board of Directors; Head of Finance Marc Greenberg will depart Blend after a transition period that includes the filing of the Company’s Form 10-K with the SEC in March 2023; and Head of Legal, Compliance, and Risk Crystal Sumner will depart Blend in early February. Upon Sumner’s departure, Winnie Ling, who currently leads the Company’s corporate and securities legal functions, will become Head of Legal, reporting to Jafari. "Over recent months we have undertaken ambitious financial and strategic planning to align our cost structure, innovation spend and go-to-market focus with both current market realities and how our customers most want to leverage our platform," said Nima Ghamsari, Head of Blend. "Today we’re announcing a comprehensive set of initiatives that affirms and accelerates our previously communicated path to profitability, including enabling Blend to realize enhanced gross margins from our Blend Platform offerings, including mortgage banking, beginning as soon as the second half of 2023."