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Countrywide Financial Corp, the largest US mortgage lender, plans to cut 10,000 to 12,000 jobs to cope with weakened housing demand, rising foreclosures, and tightening credit markets.
The cuts amount to as much as 20 per cent of the lender's workforce, and will be completed over the next three months. Some of the cuts have already been made, Countrywide said.
The reduction is by far the biggest announced in this year's US housing downturn, which has cost tens of thousands of workers their jobs.
Countrywide, based in Calabasas, California, said the cuts would be mainly in mortgage production and in general and administrative support. It said banking, insurance and loan servicing operations would likely not be materially affected.
"This current cycle is certainly the most severe in the contemporary history of our industry," chief executive Angelo Mozilo said in a letter to employees.
"During the past two years the growth in home price appreciation has stopped dead in its tracks and in many areas of the country it has turned in the wrong direction," Mozilo said.
"There have also been significant increases in delinquencies and foreclosures among far too many borrowers. More recently the secondary market for jumbo and non-agency conforming loans has become nearly illiquid."
Countrywide shares rose US29c to US$18.50 ($27.09) in after-hours trading.
They had fallen 27 cents during regular Friday trading to US$18.21. Through the close, the shares have fallen 57.1 per cent this year.
- Reuters
