Upstart Stock (NASDAQ:UPST)
According to a filing with the SEC, the cloud-based AI lending platform known as Upstart Holdings (NASDAQ:UPST) terminated the employment of 140 employees, which represents approximately 7% of its total workforce. These employees assisted in the processing of loan applications. The news caused the UPST stock to drop 3.7% in trading on Tuesday afternoon.
The fintech company said that the job layoffs were made as a result of a “difficult economy and decline in the number of loans on our platform,” both of which have contributed to a prevalent trend among companies involved in the technology industry.
In light of the current state of the economy, we have concluded that it is in the organization’s best interest to make this difficult choice. A spokesman for the firm informed Seeking Alpha in an emailed statement that there are no plans to conduct any further layoffs and that they are continuing to recruit for jobs that are important to the company’s operations.
As a result of the Federal Reserve’s aggressive tightening cycle, which is intended to bring inflation under control, Upstart, a company that offers a lending platform to banks, has been experiencing difficulties obtaining funding. This is because rising interest rates have been a primary factor in the rise in interest rates. In the second quarter of 2018, the company’s bank partners generated 321,138 loans, which totaled $3.3 billion throughout its platform. This decreased from the first quarter of 2018 when they originated 465,537 loans and $4.5 billion.
On November 8th, the company will report its profits for the third quarter.
In March, Seeking Alpha’s Quant system warned investors that the Upstart stock posed a significant threat of underperforming the market due to its expensive level and slowing momentum. Following that call, share prices have fallen by 76.4%.
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Author Shariq Khan 
