Capital One has laid off a small number of its 3,300 auto finance employees.
The layoffs occurred last week in response to the company’s decision to cut back on writing new loans, according to a spokesperson for the lender.
“We continually assess our business to ensure we are well-positioned to offer innovative and competitive products and services to all of our customers,” the spokesperson wrote in an email. “Rising interest rates, used vehicle prices and moves by competitors have created unique headwinds and compressed margins in the auto lending industry. Based on our assessment of the environment and our auto business, we pulled back on originations. To better align teams to match our current originations volume and ensure our organization remains strong and resilient, we announced changes that impacted some associates in our auto business.”
Capital One took on $8.29 billion worth of new auto loans in the third quarter, down 28 percent from a year earlier. Its originations were down 9.1 percent for the first nine months of 2022. The lender’s books held an average of $79.74 billion of auto loans during the quarter, up 8.8 percent from a year earlier.
The auto finance employees affected were given eight weeks of notice and invited to apply for other Capital One jobs, according to the spokesperson. They will receive at least 16 weeks of severance if they aren’t rehired.
Capital One was the No. 1 used-vehicle lender and the sixth-largest new-vehicle lender in 2021, according to Experian data. The Capital One spokesperson said partner auto dealerships should not be affected by the layoffs.
“Capital One remains well-positioned to support our dealer partners and customers through these market cycles, as we have throughout our bank’s history. We will continue to support our dealer partners as we always have,” the spokesperson wrote.