SoCal Lending Industry Sheds 10,000 Jobs Since March 2020
It’s dark times for Southern California’s lending industry, and not just because of the rising cost of capital.
Financial companies are victims of the pandemic fallout and have been forced to tighten their labor force, cutting 10,000 jobs since the outbreak of COVID-19. Citing data from the state’s Employment Development Department (EDD), the Orange County Register reported an estimated 103,900 people were employed at lending institutions in December in Los Angeles, Orange, Riverside and San Bernardino counties. That’s 8.8 percent below the recent peak of 113,900 jobs in March 2020.
The Federal Reserve’s rising interest rates have hamstrung the money markets by intentionally raising the bar to discourage lending, and thus restricting employment opportunities. Last year, when the effort to raise rates ramped up, loan-making companies cut 2,300 local lending jobs, equal to a 2 percent loss.
There are 53,500 lenders in L.A. County as of December, per EDD. Approximately 1,300 jobs were added in 2022 for a 2 percent gain, which raised the total to 90 percent of the employment numbers in February 2022. Approximately 3,300 lending jobs were cut in Orange County in 2022, leaving the region with 38,400 loan makers at the end of the year, which is 8 percent below pre-pandemic levels. And the Inland Empire, home to 12,000 lenders, also saw 300 jobs cut in 2022, an 8 percent drop since the pandemic hit.
Historically, Southern California’s lending workforce is 32 percent smaller than its record employment of 1990, prior to the collapse of the nation’s mortgage-making savings and loan industry.
Gregory Cornfield can be reached at firstname.lastname@example.org.