JPMorgan Cutting 9,200 WaMu Jobs

JPMorgan Chase & Co. (JPM) said Monday after market close that it will cut 9,200 jobs at recently-acquired Washington Mutual. News of the cuts, reported by both Reuters and the Associated Press, mean that more than 20 percent of WaMu’s current workforce will lose their jobs by the end of next year; a company spokesperson said roughly 4,000 jobs will be cut by the end of January, with the rest coming before the end of 2009. The remaining 5,200 are being incentivized to stay through what JPMorgan spokesman Christine Holevas said was a “transition period” — each will receive double their annual salaries retroactive to the start of Oct., she said. The 4,000 more current employees losing their jobs obviously will receive no such incentivization. The cuts are centered in corporate jobs in the failed thrift’s Seattle headquarters, with 3,400 of the cuts coming in the city; WaMu currently employs 4,300 there. Another 1,600 will come in San Francisco, although published media reports said that very few of the cuts will affect branch workers; HousingWire sources suggested a fair number of the cuts could come from the bank’s servicing operations, although no confirmation was provided by the company. Washington Mutual was siezed by regulators on Sept. 26th, with its banking assets sold off to JPMorgan for just $1.9 billion; it represents the largest bank failure in U.S. history. The bank’s $231.1 billion loan portfolio at the end of Q2 included $52.9 billion in option ARMs and another $62.5 billion in home equity loans and lines of credit. On Nov. 3, officials at Chase said they were implementing a mass loan modification program for at-risk and troubled borrowers, initiating a foreclosure freeze where cases warranted; the program, which will target as many as 400,000 loans, has been suggested to be part of a plan to address particularly toxic option ARMS acquired by JPM from WaMu. Shares of JPMorgan fell $5.54, or 17.5 percent, to $26.12 in trading Monday, as the stock market endured one of its worst days in recent history. Write to Paul Jackson at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.