Washington Mutual to eliminate 1,000 jobs

Washington Mutual to eliminate 1,000 jobs
Copyright by The Associated Press
September 14, 2007


SEATTLE - Washington Mutual Inc. said Thursday it will cut 1,000 jobs, eliminating its sales force dedicated to mortgage borrowers with questionable credit and slashing some of its wholesale banking operations.

Washington Mutual, the largest U.S. savings and loan institution, will lay off 75 dedicated subprime mortgage sales people and account managers and integrate what is left of the subprime lending business into its regular mortgage business, said spokesman Alan Gulick. He said the company will consolidate three loan fulfillment centers and lay off 340 more workers in San Antonio, San Diego and Anaheim.

Washington Mutual will also cut 210 jobs and conduct an "orderly wind-down" of parts of its wholesale banking business, which includes trading mortgages and mortgage-backed securities and lending money to other banks, the spokesman said.

Interest among investors in mortgage-backed securities has cooled dramatically as the number of people facing foreclosure after defaulting on subprime loans has grown.

The remaining job cuts will be made across the company, Gulick said.

The company said it plans to add up to 1,000 new employees to sell both prime and subprime mortgages at its regular bank branches and special home loan centers.

"Washington Mutual has been anticipating and preparing for a challenging mortgage environment for over the past 18 months," said Gulick. "We've taken strategic actions that place WaMu in a strong position to weather this market and to take advantage of growth opportunities."

The company's stock rose 33 cents, to $35.56, Thursday.