Rocket Companies, the parent company of Rocket Mortgage, extended the second round of voluntary career transition offers to employees amid the company’s forecast of much lower origination volume in the third quarter.
“We recognize career growth options in certain areas of our business are limited right now, while the housing market normalizes following two years of unprecedented volume,” said Mike Malloy, chief administrative officer for Rocket Central.
The buyout offer, which was extended on Friday, is a “completely optional plan, which will apply to a small percentage of our team members,” Malloy said. The voluntary buyout follows requests from employees that are planning a pivot to a different industry, he added.
“As a result of today’s market, some team members have told us they are considering a move to another position or a completely different industry and have asked that we reinstate our career transition incentive, first offered earlier this year.”
The voluntary buyout package includes “several months” of salary, “a portion” of their banked time off, benefits coverage through 2022 and career transition services of one-on-one career coaching, resume building and job search assistance, the executive added.
The firm did not comment on the size of the buyout or whether it will conduct layoffs if origination volume drops more than anticipated in the coming months.
Ahead of the first round of buyouts, the firm had 26,000 employees. In April, Rocket offered buyouts to 8% of its employees at its mortgage operations and title teams. The incentives included several months of salary, a portion of their banked time off and benefits coverage through November.
The nation’s largest lender hasn’t been immune to the volatile mortgage rate environment. In the second quarter, Rocket’s profit dropped to $60 million, falling sharply from $1 billion in the previous quarter due to a sharper than expected drop in the purchase business.
“Both net rate lock and closed loan volume were lower than anticipated, largely due to muted demand in purchase attributable to declining consumer sentiment and recession fears,” said Julie Booth, chief financial officer, in Rocket’s second-quarter earnings call with analysts. “Regarding our expenses, we continue to execute a disciplined and prudent approach to cost management.”
The lender’s origination volume plummeted by more than 58% in the second quarter to $34.5 billion from the previous quarter’s $53.8 billion. A year ago, during the refi boom, Rocket’s loan origination volume was $83.7 billion, a number no competitor came close to.
The company has been adding new products to offset the decline in origination volume. Earlier this month, Rocket rolled out home equity loans, targeting American homeowners with strong home equity positions, and loans for customers installing solar panels.
The company is expecting closed loan volume between $23 billion and $28 billion in the third quarter. Rocket also expects a total expense reduction of up to $150 million led by production and marketing-related costs from July to September.