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1200x675_Nima_Story_Art_2022 Nima Ghamsari, CEO and founder of mortgage fintech Blend Labs.

Publicly traded mortgage tech company Blend Labs isn’t changing its strategy to survive a shrinking mortgage market, even though a drop in originations is sapping its revenue stream and forcing it to trim its workforce. 

The Nima Ghamsari-led fintech is doubling down on its long-term strategy to offer a complete digital origination journey for clients. Blend won’t abandon its usage-based fee revenue model. And it doesn’t plan to cut prices. 

“While we are conscious of aligning our costs with market realities, we are still committed to the long-term vision for the company,” Tim Mayopoulos, president of Blend and a former CEO of Fannie Mae, told HousingWire in an interview this week. 

For investors, a warning: it means that profitability will take some time to achieve. 

To contain ballooning costs, Blend announced a decrease of 10% in its workforce this week, eliminating about 200 positions. Company executives say this will yield approximately $35.4 million per year in savings.  

“The reason we’re doing this is that, obviously, we expect mortgage volumes to decline significantly during the course of the year,” the executive said. “The refinance volume, in particular, is expected to be down 60% to 70% from last year’s volumes.”

Blend is reducing general and administrative expenses in human resources, finance, and legal, but decided not to cut costs related to engineering and product development.