Title insurer Doma will lay off approximately 515 employees, or 40% of its workforce, as part of a plan to cut costs significantly.
With the terminations, the San Francisco-based company intends to generate annual compensation expense savings between $85 million to $90 million, according to a Securities and Exchange Commission filing dated Dec. 2 and posted Tuesday. The firm will also exit leased facilities, incurring additional undetermined expenses, it said.
Doma anticipates $9 million to $10 million in employment-related charges including cash expenditures for benefits, severance and payroll taxes offset by forfeiture of bonus and stock-based compensation, according to the disclosure. The changes are expected to be completed in the first quarter of next year.
A representative for Doma didn’t respond to a request for comment Wednesday morning.
CEO Maxwell Simkoff also voluntarily agreed to cancel his previous award of 701,010 performance restricted stock units for the period between January 1, 2021 and Dec. 31, 2023, according to the filing. The award was previously granted to him under an incentive plan last October.
Doma reported increasing losses in the third quarter, attributing the performance to the combination of elevated mortgage rates, inflation and supply chain woes. The company reported an $84.1 million net loss in the third quarter, a drop from $58.7 million of net losses in the second quarter. Between July and September, Doma counted 21,509 open orders and 15,302 closed orders, declines from its second quarter figures of 25,231 open orders and 18,799 closed orders.
Doma last month said it would push to achieve profitability for the non-GAAP metric of adjusted earnings before interest, taxes, depreciation and amortization. The firm did not specifically mention layoffs in its third quarter earnings report, but in July slashed its payroll by 28%, or approximately 259 employees.
Title underwriters have endured losses from the mortgage market’s decline, but Doma was the only publicly traded title firm to report a net loss in the third quarter. The cuts announced Tuesday represent one of the larger single rounds of layoffs across the industry, as lenders, servicers and technology providers have laid off at least 20,000 workers this year.