WaMu Laying Off Thousands

Processing centers consolidated
By MortgageDaily.com staff
2/16/2006

Washington Mutual Inc. announced it will close 10 mortgage processing offices and slash thousands of jobs.

The Seattle-based thrift said Wednesday it will consolidate to 16 the number of processing offices providing administrative support to its home loan businesses.

Downsizing the network of mortgage support offices will result in approximately 2,500 job cuts, WaMu said. Work from the impacted locations will be shifted to the remaining offices, where new hires will partially offset the layoffs. Remaining locations include Irvine, Calif., Chicago, Ill., and Jacksonville, Fla.

The strategic action not only fits with its plan to "revamp its back office operations from one shaped by acquisitions to one that reflects current business needs while increasing efficiency companywide," it reflects WaMu's "ongoing focus on adjusting the cost structure of its home loans business and effectively managing capacity to better match current and anticipated mortgage market conditions."

In the fourth quarter 2005, the home loans segment's net income of $47 million was off $144 million from the previous quarter. In mortgage volume, fundings fell $7.4 billion from the third quarter to $59.5 billion.

The lender had previously disclosed it intended to reduce costs by consolidating real estate and moving back office functions to lower-cost domestic and offshore locations while opening 150 to 200 new retail banking stores nationally in 2006.

In late January, WaMu notified over 60 post-funding employees in Florence, S.C., they would be laid off by midyear or earlier due to an agreement the company reached with a vendor in India to perform their functions.

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