JPMorgan Cutting 1,800 More Jobs in Mortgage Unit
The Wall Street jobs ax is swinging again—this time at JPMorgan Chase.
The bank last Friday announced a nationwide round of job cuts in its mortgage servicing unit that would eliminate roughly 1,800 jobs, according to a person familiar with the matter. The two regions hit hardest by the layoffs: Albion, N.Y., where an entire call center will be closed, and Tampa, Fla., otherwise a growth area for the bank.
JPMorgan in February said it would cut up to 17,000 jobs, with the bulk of these layoffs coming from the mortgage servicing unit, which deals with soliciting payments from delinquent borrowers.
An improving credit landscape means fewer loans are delinquent—and fewer people are needed to service these loans. It would seem credit is improving faster than expected: The layoffs in JPMorgan's mortgage unit—up to 15,000 by the end of 2014—are more than halfway done.
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Mortgage servicing arms of nearly every bank have been shrinking for this reason. The most notable difference has been been at Bank of America, plagued for the past six years by belly-up loans and litigation resulting from its acquisition of troubled home lender Countrywide in 2006.
The company, in just the span of one year, has seen its portfolio mortgages delinquent 60 days or more fall to $700 million from $1.1 billion. For that reason, the unit has eliminated roughly 14,000 jobs, bringing its headcount to roughly 43,000 employees.
Investors have been optimistic about such cost-cutting programs at the big banks as they move to become more efficient. As the market for originating new mortgages chugs forward, banks can focus on underwriting new loans—instead of providing costly service for old, delinquent loans. JPMorgan's shares are up nearly 20 percent year-to-date.
—By CNBC's Kayla Tausche. Follow her on Twitter: @KaylaTausche.