UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
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Item 7.01. Regulation FD Disclosure.
On April 17, 2023, Walker & Dunlop, Inc. (the “Company”) announced a workforce reduction of approximately 8% (110 employees) in response to continued challenging conditions in the commercial real estate financing and services market. The Company expects to realize a one-time expense of approximately $3 million to $4 million in the second quarter of 2023 and annualized personnel expense reductions of $25 million as a result of this action.
The Company will provide further details regarding the workforce reduction during its earnings call scheduled for May 4, 2023.
A copy of an email from Willy Walker, our Chairman and Chief Executive Officer, to Company employees regarding the reduction is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information set forth in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information set forth in this Item 7.01, including Exhibit 99.1, shall not be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Forward-Looking Statements
This Current Report on Form 8-K, including Exhibit 99.1, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company’s current expectations and projections with respect to, among other things, the impacts of the workforce reduction and our outlook on the commercial real estate market. These statements may be preceded by, followed by or include the words “anticipate,” “believe,” “expect,” “forecast,” “intend,” “likely,” “outlook,” “plan,” “potential,” “project,” “projection,” “seek,” “can,” “could,” “may,” “should,” “would,” “will,” the negatives thereof and other words and terms of similar meaning. Forward-looking statements include all statements that are not historical facts. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Among these factors are risks related to the “Risk Factors” identified in the Company’s Annual Report on Form 10-K for 2022, as it may be updated or supplemented by subsequent Quarterly Reports on Form 10-Q and other SEC filings.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number |
Description |
| 99.1 | Email from Willy Walker to All Employees dated April 17, 2023 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WALKER & DUNLOP, INC. | ||
| (Registrant) | ||
| Date: April 17, 2023 | By: | /s/ Gregory A. Florkowski |
| Name: Gregory A. Florkowski | ||
| Title: Executive Vice President & Chief Financial Officer | ||
Exhibit 99.1
To: All Employees
From: Willy Walker
Date: April 17, 2023
Time: 4:00 pm ET
Subject: Today’s Actions
Dear WDers:
Today is a sad day for all of us at Walker & Dunlop, as we have said farewell to more than 100 of our colleagues and friends, all of whom have made important contributions to our company.
We held on to our entire team entering 2023 thinking that commercial real estate transactions would recover once the Federal Reserve stopped raising rates. Unfortunately, with the Fed still raising rates, and the market disruption caused by the recent bank failures, we simply don't have visibility into when market activity will return to normal and must take action.
Today is one of those super challenging days when we deliver extremely hard news, thank an exceptional group of people for all their service
and contributions to W&D, and then must immediately focus on our ongoing business, strategy, and growth.
As you process the actions taken today, please keep in mind:
| 1) | We approached this reduction thoughtfully, holistically, and strategically. The decisions to eliminate positions across the enterprise were based on a careful evaluation of each department’s needs. No decision was easy. |
| 2) | We are committed to supporting our colleagues as they transition out of W&D. We are providing separation packages with outplacement support and will do all we can to help them explore new opportunities. |
| 3) | We remain committed to ALL of our business lines. We could dramatically cut or exit businesses that the market is severely impacting today. We are not. We have the financial wherewithal and confidence in our future growth to continue investing in these businesses. |
| 4) | Looking ahead, we have a great deal to be optimistic about: |
| i. | We have an exceptional business model that provides long-term financial stability due to our scaled servicing and asset management businesses. |
| ii. | We are the largest GSE lender in the U.S. and second-largest HUD lender. Access to counter-cyclical capital, guaranteed by the US Government, is in high demand today, and we expect to maintain our market-leading position in 2023 and beyond. |
| iii. | The recent bank failures present a huge opportunity for growth in our debt brokerage and asset management businesses. Borrowers go direct to banks, and when regional and local banks pull back on lending, borrowers will turn to debt brokers to find financing. And as banks pull back on commercial real estate lending, our asset management business has the opportunity to raise capital to meet the borrowing needs of our customers. |
| iv. | We have zero credit risk on any commercial real estate asset class beyond multifamily, and our multifamily at-risk portfolio is filled with exceptional, conservatively underwritten loans. |
| v. | 80% of our lending and sales activity is in multifamily. And while the current market is challenging, other commercial real estate asset classes, such as office, have far deeper problems. We are fortunate that our strategy and growth has been predominantly in the multifamily industry. |
| vi. | Finally, we have an amazing team and culture at W&D. While saying goodbye to our friends and colleagues is extremely difficult, the more than 1,300 of us who remain will continue to make this company special. We are facing the current market challenges head-on and are now stronger and more competitive than ever before. |
We will hold an All-Company Town Hall at 5:00pm ET today to come together as a team, discuss the action we have taken, and answer any questions you have.
Thank you for all you do at W&D. I look forward to seeing all of you on the Zoom call in an hour.
Sincerely,
Willy
Cover |
Apr. 17, 2023 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Apr. 17, 2023 |
| Entity File Number | 001-35000 |
| Entity Registrant Name | Walker & Dunlop, Inc. |
| Entity Central Index Key | 0001497770 |
| Entity Tax Identification Number | 80-0629925 |
| Entity Incorporation, State or Country Code | MD |
| Entity Address, Address Line One | 7272 Wisconsin Avenue |
| Entity Address, Address Line Two | Suite 1300 |
| Entity Address, City or Town | Bethesda |
| Entity Address, State or Province | MD |
| Entity Address, Postal Zip Code | 20814 |
| City Area Code | 301 |
| Local Phone Number | 215-5500 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock, Par Value $0.01 |
| Trading Symbol | WD |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |