General Electric's Subprime Unit to Lay Off Half its Staff
General Electric's WMC Mortgage subprime lending unit plans to lay off 771 workers, about half of its staff, a spokeswoman said.
The layoffs will include the closing of facilities in Costa Mesa and San Ramon, California, as well as Addison, Texas. Following the cuts, WMC will employ about 700 people, spokeswoman Brandie Young told Reuters.
"We have realigned our resources to meet customer needs and we've announced a layoff, a workforce reduction, which will include the closure of three smaller offices," Young said. "It certainly is in response to the changes across the industry and to align us to the current operating environment."
The Burbank, California-based lender in March disclosed layoffs of more than 460 people.
When GE reported first-quarter financial results, the company said it had cut lending dramatically, making just $3.4 billion in new loans during the first quarter, down from $9 billion in the fourth quarter.
Subprime lenders make home loans to less-creditworthy buyers. As the U.S. housing market has cooled, that business has slowed dramatically and faced higher rates of default. At least 20 subprime lenders have gone out of business as a result.
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