JPMorgan Offers Dwindling For Bear Stearns Employees

At a recent conference, CEO Jamie Dimon of JPMorgan Chase & Co. said the company has extended job offers to about 60% of the workforce at Bear Stearns Cos following an acquisition deal that Dimon expects to result in a $1 billion second-quarter gain.


On Monday, Dimon spoke at a UBS investor conference that the merger would yield a projected $1 billion gain, as the added Bear Stearns capital would be offset by approximately $9 billion in losses due to asset sales, purchase accounting, restructuring, litigation costs and second-quarter losses for the collapsed company.

JPMorgan has already realized $200 million of losses from Bear Stearns resulting from its 49.5% ownership of the company since April 8, according to Dimon, and JPMorgan expects roughly another $200 million in future losses.

The CEO told conference attendees that JPMorgan has identified positions for approximately 40% of the Bear Stearns workforce of almost 14,000 employees, declaring that roughly three-quarters of the merger-related employment decisions have been completed already.

Approximately 3,500 employees still don’t know if they will have positions, but they are expected to find out before the merger is expected to be completed on June 1.

These unresolved staff positions mostly involve technology and operations, but reports suggest that JPMorgan also expects to makes some cuts from its own staff to make room for Bear Stearns employees.

JPMorgan has been scaling back its mortgage operations for months, including the November announcement that the company would cut 100 subprime mortgage jobs.

Nationally, mortgage employment dropped for 13 consecutive months with the latest report for March, dropping 144,600 jobs since employment peaked at 504,700 in October 2006.



Posted on Tuesday, May 13, 2008 by Mortgage Ledger staff