Blend, Former SF Tech Unicorn, Implements 5 Layoff Rounds in Just 16 Months

Blend Labs, a financial technology company based in San Francisco, is laying off a sizable chunk of its employees for the fifth time in 16 months.

The firm announced the 150-employee job cut, which will trim the company’s “onshore workforce” by almost a fifth, in a Wednesday filing with the Securities and Exchange Commission. The company has never turned a profit since launching in 2012 as a software developer for mortgage applications. More recently, Blend has developed other consumer banking tech. But as interest rates have risen, the firm’s core mortgage business has grown more difficult to operate, the company wrote last April.

Blend lists financial giants like KeyBank and BMO Harris Bank among its mortgage software customers. After attaining “unicorn” status in a 2020 funding round, Blend went public in July 2021 at a $4.4 billion valuation, boosted by early pandemic excitement over digital banking. But since then, the firm’s stock has seen a long plunge — the market cap is down to about $365 million now.

In that time, the firm, headquartered in downtown San Francisco, has laid off workers again and again and again. Last year, Blend announced job cuts in April (200 workers), August (220) and November (100). In the new year, the layoffs continued — a 340-worker cut was announced in January, as well as the round Wednesday. The latest cut will leave them with about 640 employees, down from a high of about 2,200 in early 2022.

Blend did not respond to SFGATE’s request for comment or disclose exactly how the new job cuts will play out across the company, but wrote in a blog post to customers that the firm is keeping “major customer-facing efforts around professional services, customer success, and integrations largely intact.”

Though larger layoffs at Meta and Google dominated headlines at the beginning of the year, a steady stream of smaller Bay Area firms have continued to pare back their workforces throughout the summer. After the overinflated valuations and massive hiring of the pandemic, companies are now facing a more difficult economic climate, with wary investors and higher interest rates.

Cost cuts have ensued, as well as full-on firm shutdowns. Still, this many layoff rounds, so close together, is rare.