Daily News and Information for the Mortgage Loan Originator
IndyMac Slashes 24% of Workforce
Wednesday, January 16, 2008
- By Staff Writer, Originator Times
PASADENA, CA - IndyMac Bancorp Inc. has announced they will cut 24% of its workforce, laying off 2,403 employees and closing five of its mortgage centers. The mortgage giant experienced a loss of $202.7 million during the third quarter of 2007 - quite a change from one year earlier where IndyMac posted earnings of $86.2 million for the third quarter of 2006. The company is expected to post an additional fourth quarter loss to be announced on February 12.
The layoffs will save IndyMac an estimated $136 million yearly in labor costs. IndyMac's chief executive Mike Perry said the move was necessary as the company adjusts to market conditions and to give them a chance to return to profitability in the latter part of 2008.
In a memo to his employees, Perry said, "This action is clearly painful, but it is necessary in our drive to return IndyMac to profitability soon."
The cuts were preceded by 1,600 layoffs that took place at the company last year. Further layoffs of up to 1,000 more IndyMac employees are expected in the first and second quarters of this year.
CitiGroup is also expected to announce more layoffs after their fourth quarter losses added up to $10 billion - the largest in its 196-year history. Citi announced they had already cut 4,200 jobs in the fourth quarter after 17,000 layoffs were announced last spring.
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