Rocket offers buyout to 8% of mortgage, title workers

Rocket Cos. is the latest mortgage industry participant to undertake a staff reduction, with the company confirming an internal announcement made late on April 25.

It is offering a voluntary buyout to 8% of its employees in Rocket Mortgage’s operations team and various groups in its Amrock title and valuation business.

During 2021, 1,900 Rocket employees transferred to new roles within the organization, an SEC filing stated. The company has approximately 26,000 employees. If all those offered take the buyout, it would reduce headcount by about 2,080.

The company’s most recent earnings report, for the fourth quarter, showed quarterly declines in both overall income and mortgage origination volumes. However, Rocket positioned the buyout offers as a means of fostering employee advancement.

Several company employees expressed to management their desire to change positions or leave the business entirely because of the down origination current cycle in the mortgage industry, according to a statement from Mike Malloy, chief administrative officer at Rocket Central, which provides human resources services for Rocket Cos. Market conditions are limiting career growth options at Rocket Mortgage and Amrock, he said.

“With this in mind, we are focused on giving our team members pathways to career success — which is why Rocket Mortgage and Amrock today offered a voluntary career transition opportunity to a select group of its team members,” Malloy said. “This optional plan will provide team members several months of salary, a portion of their banked time off, benefits coverage through November, vesting of stock the team members were awarded at Rocket Cos.’ IPO and career transition services — which includes one-on-one career coaching, resume building and job search assistance.”

Rocket granted restricted stock units to its employees, who generally vest for two years on the grant date or over a three-year period with one-third vesting on each anniversary, according to its 10-k filing.

Rocket went public on Aug. 6, 2020, pricing at $18 per share. At 10 a.m. on April 26, the stock was trading at $9.02 per share.

The drop in originations since late last year hit certain companies pretty hard. Better.com, which Rocket Cos. Vice Chairman and CEO Jay Farner took a shot at during the first quarter earnings call over how it conducted staff reductions, announced a third round of layoffs on April 19.

At the same time, mortgage technology company Blend Labs reduced headcount by 10%. Wells Fargo said it was laying off an undisclosed number of mortgage employees. PennyMac filed a notice in California for 236 permanent job cuts to take place in May. Last November Interfirst laid off 77 employees in North Carolina, in addition to an unconfirmed number of workers in its main office in Rosemont, Illinois.