American online lender LendingClub has decided to retrench 460 employees as the coronavirus (Covid-19) pandemic has badly affected the demand for consumer loans.

The layoffs, which have been approved by the company’s board of directors, account for nearly 30% of the company’s workforce of 1,538 people as of December 2019.

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The move is in line with the company’s restructuring plan which was submitted in a regulatory filing to the US Securities and Exchange Commission (SEC) earlier this week.

LendingClub expects nearly $10m in pre-tax restructuring charges, of which $1m represents an employee relief plan to assist the impacted employees.

The remaining amount represents cash expenses for severance payments and related benefits.

In the filing, the company said: “Covid-19 is having an unprecedented effect on consumers, small businesses and the broader economy, including the credit markets, and has resulted in a current reduction in platform investor demand for personal loans.”

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Additionally, the San Francisco-based company said that it will also reduce its executives’ base salaries by 25%, while CEO Scott Sanborn will take a 30% pay cut.

The board of directors will also voluntarily reduce their cash retainers by 30%.

The pay cuts, however, will not affect employees with salaries less than or equal to $100,000.

LendingClub CEO Scott Sanborn said: “The move was necessary to ‘realign’ staffing with the current business environment.

“With these actions, we believe we are well-positioned to achieve our long-term strategic goals and better serve our members, who will need us more than ever, once the economy stabilizes.”