IndyMac slashes 2,403 jobs

NEW YORK Tue Jan 15, 2008 6:19pm EST

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NEW YORK (Reuters) - IndyMac Bancorp Inc IMB.N, one of the largest U.S. mortgage lenders, said on Tuesday it is eliminating 2,403 jobs, or 24 percent of its workforce, to cope with deteriorating housing and capital markets.

Chief Executive Michael Perry announced the cuts in an e-mail to employees, three months after he had said the Pasadena, California-based parent of IndyMac Bank was "largely done" with staff cuts.

"The reality is that since October 12 conditions have gotten worse," Perry wrote.

The latest cuts include double-digit percentage reductions in most major business lines, including a 30 percent cut in mortgage production. IndyMac also plans to close five of its 16 wholesale mortgage centers by the end of March. It expects to employ 7,535 people after the cuts.

"This action is clearly painful, but it is necessary in our drive to return IndyMac to profitability soon," Perry wrote. He said the company has a "realistic shot" of returning to profitability in the second half of 2008.

In November, IndyMac cut its dividend in half and posted a $202.7 million third-quarter loss after credit losses quadrupled. The following month, Perry projected a fourth-quarter loss, and said the company was exploring ways to shore up capital, including another dividend cut, capital raising, and shrinking its balance sheet.

IndyMac made $64.89 billion in home loans from January to September, ranking ninth nationally, and second after Countrywide Financial Corp CFC.N among independent, publicly traded lenders, the newsletter Inside Mortgage Finance said.

Countrywide agreed last week to be bought by Bank of America Corp (BAC.N) for $4 billion.

IndyMac released the e-mail in a U.S. Securities and Exchange Commission filing. Its shares closed Tuesday down 27 cents at $4.49, and have fallen 89 percent in the last year.

(Reporting by Jonathan Stempel; Editing by Tim Dobbyn, Phil Berlowitz)

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