DETROIT (WWJ) - Hundreds of employees are faced with a big decision this week after Detroit-based Rocket Mortgage announced it is asking some of its workforce to accept a buyout on Monday.
Following a recent decrease in the mortgage market due to rising interest rates, roughly 10% of 26,000 employees for Rocket Mortgage and Amrock were given a voluntary buyout option in an attempt to reduce the company's workforce.
Employees within Rocket Mortgage's operations team and some groups with Amrock have until Friday to make a final decision, The Detroit News reported.
"One of our responsibilities as a company is to provide our team members a fulfilling career, and we have been able to do that for tens of thousands in the last 36 years," Mike Malloy, chief administrative officer at Rocket Central, said in a statement Monday. "Over that time, we have been through several market cycles — similar to those the industry is experiencing today.
"As a result of today's market, some team members have told us they are considering a move to another position or a completely different industry. At the same time, our career growth options in certain areas of Rocket Mortgage and Amrock are limited right now, while the housing market normalizes after two years of unprecedented volume."
According to The Detroit News, employees who accept the buyout option will be paid for several months on top of full medical, dental and vision coverage through November; a pay out for banked personal time off; early vesting of stock that employees received at the company's initial public offering, and career coaching, resume building and job search assistance to help in securing future jobs.
Officials said rising interest rates are fueling the company's need to reduce jobs, in addition to a low stock of for-sale homes on the market. Just last week, the federal interest rate surpassed 5%; the interest rate at this time last year was under 3%.
As a result, homeowners are unable to refinance their mortgages and the Federal Reserve said relief is not in sight.
Jerome Powell, Chairman for the Federal Reserve, indicated that the central bank will hike interest rates up even more in an effort to hit back against inflation, which is the highest its been since January of 1982.
Rocket Mortgage isn't the only comapny looking to slim down its workforce.
In March, over 3,000 layoffs were announced at New York-based Better Mortgage's Better Holdco Inc. The layoffs — which encompassed a third of its employees — followed a mass firing the company made of more than 900 workers over Zoom at the end of 2021.
CEO Jay Farner had mentioned in a fourth-quarter earnings call earlier in the year that Rocket Mortgage would not repeat the way Better Holdco handled their layoffs.
"... we're not going to have a conference call where all of a sudden we let a group of them know they're not going to be working here any longer," Farner said. "That's just not how we do this. That profitability is important, but the investment in our team members is the most important thing that leads to the future growth of this organization."
