Ally to End Mortgage Originations, Cut Jobs - BBG

Ally Financial (NYSE:ALLY ) plans to exit its mortgage origination business and reduce its workforce due to increasing credit challenges and the impact of higher interest rates, according to a report from Bloomberg on Wednesday. 

The article says that a statement from an Ally spokesperson to Bloomberg News revealed the company will cut less than 5% of its total workforce, which numbered about 11,100 employees at the end of 2023. 

The layoffs will be spread across various departments, though the company did not specify which areas or locations would be affected.

The decision comes as Ally grapples with more expensive borrowing costs for U.S. consumers, particularly in its auto-lending division, where the company has tightened its lending criteria. 

This tightening of loan requirements is aimed at reducing loan charge-offs amid rising credit concerns. In addition to the workforce reductions, Bloomberg said that Ally is also exploring strategic alternatives for its credit card business, a move previously reported in November.

In the email to Bloomberg, Ally spokesperson Peter Gilchrist noted, “As we continue to right-size our company, we made the difficult decision to selectively reduce our workforce in some areas, while continuing to hire in our other areas of our business.” 

Despite the cuts, Ally continues to focus on its other business lines and is taking steps to mitigate the impact of the changing financial landscape.

Ally's decision to exit mortgage originations and review its credit card business underscores the company's efforts to adjust its operations in response to the shifting economic environment. 

 

Source: Investing.com