Industry News

WaMu to let 3,150 workers go as mortgage losses mount

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Washington Mutual Inc. said Monday it is laying off 3,150 workers and issuing $2.5 billion in preferred stock as part of efforts to cut costs and raise capital in the face of mounting losses in mortgage lending. WaMu will said it would close 190 of its 336 home loan centers and sales offices and nine home loans processing and call centers, as fourth quarter charge-offs for loan losses are expected to hit $1.6 billion, or twice the amount previously expected. The layoffs include about 2,600 positions in home loans -- more than one in five employees in that group -- plus 550 corporate and support positions. As part of "a significant change in the strategic focus of its home loans business," the bank said it is discontinuing all remaining lending through its subprime mortgage channel, and closing WaMu Capital Corp., its institutional broker-dealer business. Also targeted for closures is WaMu's mortgage banker finance warehouse lending operation. The Seattle-based bank, which is increas...