Envoy Mortgage had its third round of layoffs the week before Thanksgiving, according to employees impacted.
The company shed close to 30% of employees in its corporate office in Houston, Texas. As of Wednesday, the company has over one thousand employees per LinkedIn, but employees interviewed say that number is much higher than the true headcount today.
Full-time employees that survived the layoff had a mandatory pay cut of 20%, meanwhile contractors experienced a 25% reduction. The company’s branch locations located in over 35 states — mainly made up of commission-based employees — were minimally impacted, employees say.
Envoy Mortgage did not immediately respond to a request for comment.
The layoff caught many by surprise as upper management informed employees in October that they had enough resources to weather the market conditions.
“We were told that our jobs were secure and that the company was going to ride out the storm,” a former Envoy manager said. “They said that their investors were fully on board with it, that we were well securitized and that there was no need for any additional layoffs.”
Two previous layoff rounds took place in August and October during which the company executed a mandatory pay cut for underwriters and took away 401k matching for all employees, former employees say.
Unlike others executing layoffs in the industry, Envoy employees received close to four weeks of severance pay and were reimbursed for their remaining PTO.
Upper management explained that layoffs were a result of the market downturn, but former employees also say that the company was making unnecessary investments into technology.
In recent months Envoy updated its loan origination platform and proceeded to move most of its infrastructure to the cloud.
“With the current state of the market and how the company is doing, now is not the time to be concentrating on these migrations, moving into the cloud and adding all these unneeded expenses,” a former IT manager said. “We should have been in a cost savings mode instead of doing these big projects. We should have been trimming the fat and trying to stay lean and save money.”
A veteran originator let go in Envoy’s most recent purge noted that instead of throwing money at new technologies, lenders need to focus on education.
“You have a generation of owners who have not experienced an economic downturn and they don’t know how to respond to it,” the originator said. “Instead of falling back on guys like myself, instead of coming to us and asking what they should do, they treat us like we should go sit in rocking chairs for the rest of our lives in nursing homes.”
“Now’s not the time to go out and buy a brand new technology and try to create an infrastructure of reporting,” the loan originator added. ” It’s time to bow down a little bit and put the money into education, which we don’t do enough of in the industry. We don’t train anybody enough to know how to make this transition.”