Credit reporting agency Equifax cut 10% of its employees and contractors in the fourth quarter.
That amounts to 2,350 workers being let go, according to its fourth quarter earnings report published Thursday. Some of those employees were mortgage-related personnel, per a senior director impacted by reductions that took place.
Equifax’s revenue was $1.2 billion in the fourth quarter, down 4% due to a 41% decline in mortgage revenue.
And while the company’s overall business year-over-year grew by 4% to a whopping $5.1 billion, the company experienced a “significant 23% mortgage revenue decline” year to date.
“We delivered a strong 2022 with 17% non-mortgage growth in an unprecedented mortgage market decline,” said Mark Begor, CEO of Equifax during the company’s earnings call. “To respond to the declining mortgage market and uncertain economy, we are accelerating our data and technology cloud transformation cost savings and executing broader proactive cost actions to deliver $200 million of spending reduction in 2023, including $120 million in expense and $80 million in capital spending reductions.”
The company’s CEO highlighted that Equifax will focus on its “non-mortgage” side of the business, which he projects to be strong throughout 2023.
“We are energized about the new Equifax and remain confident in our long-term 8-12% growth framework that will deliver higher margins and free cash flow,” he added.
Equifax and other credit-reporting bureaus have come into the spotlight in the past year, as the mortgage industry has moved towards accepting and slowly incorporating alternative data.
The credit-reporting agency announced last year that it would begin including utility, cable and telecommunications payment data in credit reports sent to mortgage companies. The addition of the new types of payment histories alongside data already available within credit reports is expected to expand opportunities for first-time buyers.
Equifax is not the only vendor impacted by the low origination environment. Other vendors that provide services to the mortgage industry have either cut personnel or have shuttered operations entirely.
In January, cloud-based banking platform provider nCino, which recently acquired SimpleNexus, slashed 7% of its workforce. Meanwhile, provider of mortgage fulfillment services, Promontory MortgagePath, closed its doors in November due to “unprecedented and rapid mortgage market deterioration.”
