Nelnet Stock Falls 9% on Modified Government Contract, Layoffs
23 Mars 2023 - 10:33PM
Dow Jones News
By Sabela Ojea
Shares of Nelnet Inc. on Thursday fell 8.7% to $82.41 in
after-hours trading after company said it laid off about 7% of its
workforce after the U.S. government modified the terms of a
contract.
The financial services firm said its loan servicing contracts
with the Education Department have been modified and it will now
earn a lower price per borrower each month.
Furthermore, the Education Department is transferring 1 million
borrowers from the company's loan servicing to another federal
provider, Nelnet added.
Both the price reduction and the unexpected transfer of
borrowers will significantly affect the company's diversified
services division, it said.
About 550 associates who worked at the diversified services
division have been fired. Other workers in areas that supported the
division are also being laid off, Nelnet said.
As of the end of 2022, Nelnet had 4,478 diversified services
division workers, and 8,237 employees in total.
Write to Sabela Ojea at sabela.ojea@wsj.com
(END) Dow Jones Newswires
March 23, 2023 17:18 ET (21:18 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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