Doma Holdings to cut about 40% of current workforce to reduce costs

In a regulatory filing, Doma Holdings disclosed that on December 6 the company committed to implementing a strategic initiative and corresponding reduction in workforce "designed to reduce costs, improve Local branch-level profitability, and focus resources on its instant underwriting capabilities." The reduction plan is intended to generate estimated annualized compensation expense savings of between $85M-$90M and additional long-term facility related expense savings, beginning in the first quarter of 2023. The reduction plan includes the elimination of approximately 515 positions across the company, or approximately 40% of the company’s current workforce. As part of the reduction plan, the company expects to incur between approximately $9M-$10M in employment related charges, including cash expenditures for employee benefits, salary continuation, severance payments, payroll taxes and related costs offset by forfeitures of bonus and stock-based compensation. In the fourth quarter of 2022 and first quarter of 2023, the company expects to incur restructuring charges related to decisions to exit or cease use of certain leased facilities to align with the company’s anticipated operating needs. "The company cannot reasonably estimate these facility restructuring charges at this time. Similar to prior reductions in force, these charges will be outside of adjusted EBITDA," the filing stated. The company expects the execution of the reduction plan, including cash payments, will be substantially complete in the first quarter of 2023. In addition, on December 2, the company’s Chief Executive Officer, Maxwell Simkoff, voluntarily agreed to forego and cancel a previous award of 701,010 performance restricted stock units for the performance period beginning January 1, 2021 through December 31, 2023 granted to him under the company’s Omnibus Incentive Plan on October 5, 2021, all of which are unvested.