Countrywide Lays Off 900 More, Lehman 850 More

After announcing 500 layoffs August, Countrywide Financial Corp. will eliminate another 900 positions nationwide as Lehman Brothers Holdings Inc. deepened its job cuts through 850 terminations following last month’s closure of its subprime mortgage business.Last month, Countrywide eliminated 500 positions within the company, largely at its Full Spectrum Lending unit.The division mostly deals with the origination of low-documentation and Alt-A mortgages.The other cuts took place within Countrywide’s wholesale lending unit.The Calabasas, California-based company said it ended July with 61,589 employees, up from 60,427 one month earlier and 54,655 at year end. It reported adding jobs every month through July."Countrywide has always aligned its organization to best serve the needs of its customers and reflect the market and economic conditions in which we operate," said the company."While as a matter of policy we don't comment on speculation, any further changes to the Countrywide organization will reflect our ongoing strategy to align our business to the marketplace."In addition to tightening its underwriting and discontinuing certain adjustable-rate mortgages, Countrywide recently borrowed $11.5 billion and sold a $2 billion stake to Bank of America so it could maintain its retail banking and mortgage lending businesses.Just two weeks before announcing the previous job cuts, Countrywide boasted of a market positioning which allowed it to pick up employees that had been cast aside by its bankrupt competitors.Meanwhile, Lehman said it was eliminating 850 positions.Last month, the nation’s largest underwriter of U.S. mortgage bonds announced it was closing down subprime subsidiary BNC Mortgage LLC, resulting in approximately 1,200 job cuts in 23 cities.Lehman had previously said it would merge BNC with the firm’s Aurora Loan Services LLC platform, where it continues to originate Alt-A loans.The majority of the new round of layoffs will take place at Aurora.In addition to the job cuts, Lehman said it would close its residential loan business in the Korean market.“We now have a business that is sized correctly for the current environment,” said Ted Janulis, the global head of mortgages at Lehman. “We will continue to look at other origination opportunities in global markets.”Lehman will incur a $20 million after-tax charge as a result of the consolidation.Posted on Friday, September 07, 2007 by staff