Bank of Ireland and other lenders are asking mortgage applicants employed by tech giants to provide letters from their employers to say their jobs are not at risk from the wave of recent layoffs hitting the sector.
ayoffs are accelerating among tech employers as the heightened demand these firms enjoyed during pandemic lockdowns wanes and as they brace for a global economic downturn.
Gerry Hiney from Dublin-based mortgage brokerage Park Financial Planning said: “Lenders are asking for a letter from any of the companies that have made announcements about redundancies to say the [mortgage applicant] has not been affected.
“We are able to get that (letter) in some instances but in other instances we can’t because employers don’t know whether a person’s position will be impacted.
“For every 10 mortgage applications we receive, three or four are usually from Facebook, Salesforce, Google and Microsoft, but that has been reduced to two in 10 since the beginning of the year.”
He said high earners – often earning in excess of €100,000 – were among those being affected and this could potentially have a knock on effect on the higher end of the housing market.
Trevor Grant, chairperson of the Association of Irish Mortgage Advisors, said ‘letters of comfort’ are sought by lenders if an employer in any sector has made a public announcement about job losses.
However, Bank of Ireland is “the only lender asking me for letters as standard for certain tech companies that have announced job losses”.
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Trevor Grant, chairperson of the Association of Irish Mortgage Advisors, said ‘letters of comfort’ are sought by lenders if an employer in any sector has made a public announcement about job losses
A spokesperson for Bank of Ireland said: “Where an employer makes a public announcement in respect of job losses, we will typically add a checkpoint to our pipeline to check that the customer is not impacted prior to progressing to drawdown.
“We have been doing this for companies in the tech sector since initial announcements were made in November. Our experience to date is that most customers seeking to progress are not impacted and their employers have provided confirmation to confirm this.”
A spokesperson for AIB, which also owns EBS and Haven, did not immediately respond to a request for comment.
A spokesperson for the Banking and Payments Federation of Ireland said: “A lender must adhere to requirements set out in law and in statutory regulation to satisfy itself that the loan being applied for is sustainable over the long term.”
Google parent Alphabet said on Friday it would cut 12,000 employees globally. Last week, Microsoft – which employs more than 3,500 people in Ireland – confirmed it is shedding about 10,000 roles worldwide.
In early January, Salesforce said it was laying off 8,000 people and Amazon is to ax more than 18,000 jobs. Twitter, Meta and Stripe have also unveiled job cuts.