Ocwen spinoff fires 800 of its employees

by MPA22 Jan 2015
Ocwen Financial Corp's trouble has lead to its spinoff company, Altisource Portfolio Solutions, to let go hundreds of employees due to shrinking revenue at its biggest client. Altisource was spun out of mortgage servicer Ocwen in 2009, and still gets around 65% of its revenues from Ocwen.

According to a conference call with investors, Altisource said the layoffs are a response to significant declines in revenue at Ocwen. The Atlanta-based servicer is currently dealing with a mountain of regulatory issues

Altisource said it has created a plan for reducing its expenses that includes "eliminating non-revenue-generating businesses, reducing vendor fees and eliminating staff to reduce costs," Michelle Esterman, CFO at Altisource, said.

"We have a very specific plan for expense reductions, including the recent elimination of over 800 individual employee positions and hundreds of contractors across our geographical footprint," Esterman said. She added that if the plan had been complete at the beginning of the fourth quarter, expenses "would have been approximately $20 million lower."
 

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