UPDATE 1-Washington Mutual to cut 1,000 jobs
(Adds Washington Mutual comment, details)
NEW YORK, Sept 13 (Reuters) - Washington Mutual Inc (WM.N), the largest U.S. savings and loan, is laying off 1,000 employees as it copes with slumping housing demand.
The thrift has been shrinking its mortgage business over the last two years as home prices stopped rising, defaults increased, and investors grew resistant to buying all but the safest home loans.
"We've felt the effect of a greatly changing capital markets environment," spokesman Alan Gulick said on Thursday.
Gulick said Seattle-based Washington Mutual will close a conduit business that purchased mortgage loans from third parties and packaged them into securities.
"We've retained the infrastructure and capabilities of our structuring and distribution team, so we can continue to securitize WaMu products internally," he said.
Washington Mutual said it will also merge its subprime lending business, which focuses on borrowers with weak credit, into its prime business, eliminating the separate sales force.
Among the cuts will be 340 workers in loan centers in San Antonio, Texas; Anaheim, California; and San Diego, along with 210 capital markets workers and 75 subprime lending employees, the thrift said.
Gulick said Washington Mutual plans in the next several months to add up to 1,000 mortgage loan consultants for its branches and home loan offices, giving it about 4,000 overall.
Washington Mutual's home-loans unit employed 12,735 people at the end of June, down from 17,726 at the end of 2005. The unit lost $150 million in the first half of this year.
Companies have announced well over 50,000 mortgage-related job cuts this year, led by the 10,000 to 12,000 announced last Friday by Countrywide Financial Corp CFC.N, the largest mortgage lender.
Memphis-based First Horizon National Corp (FHN.N) late Wednesday said it will cut 1,500 jobs by early next year as it reduces its exposure to the housing market. Washington Mutual shares rose 46 cents, or 1.3 percent, to $35.69 in afternoon trading on the New York Stock Exchange. Through Wednesday, the stock had fallen 22.6 percent this year.
(Reporting by Jonathan Stempel)
((Editing by Tim Dobbyn, Gary Hill; Reuters Messaging: jon.stempel.reuters.com@reuters.net, 646 223 6317)) Keywords: WASHINGTONMUTUAL MORTGAGE/JOBS
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