SEATTLE – Thrift bank Washington Mutual Inc. will cut 1,000 jobs, eliminating its sales force dedicated to mortgage borrowers with questionable credit and slashing some of its wholesale banking operations.
The bank will lay off 75 dedicated subprime mortgage sales people and account managers and integrate what’s left of the subprime lending business into its regular mortgage business, spokesman Alan Gulick said Thursday.
Gulick said the company will consolidate three loan fulfillment centers and lay off 340 more workers in San Antonio, San Diego and Anaheim, Calif.
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.
“We have felt the effect of a greatly changed secondary market environment,” Gulick 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 jobs cuts will be made across the company, Gulick said.
At the same time, Washington Mutual said it plans to add up to 1,000 new employees, who will sell both prime and subprime mortgages at the company’s regular bank branches and special home loan centers around the country.
“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.”
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