The deepening housing slump has caused an alarming surge in job losses at financial services companies, and the end is nowhere in sight, consulting firm Challenger, Gray & Christmas said on Tuesday.
The industry has announced 87,962 job cuts so far this year, 75 percent more than the 50,327 recorded for all of 2006, Challenger said. Nearly one-fourth of this year's cuts have been announced in August alone.
Of this year's cuts, 35,830, or 41 percent, were tied to housing market troubles, including riskier subprime mortgages. Job cuts set by real estate and construction firms total 21,620, more than twice the number for all of 2006, Challenger said.
"Many companies expected the mortgage situation to implode; they've just been wondering when the bubble would burst," Chief Executive John Challenger said in an interview.
"But many are stopping on a dime, shutting down operations," he said. "Companies are not surprised by what's happening, but the reality of the situation and the speed with which it occurred is shocking."
The CEO said it could be months before housing-related job cuts peak.
Many companies exposed to the housing market have struggled with rising delinquencies and foreclosures, as mortgage rates reset higher and housing price appreciation slowed.
Meanwhile, credit in debt capital markets has tightened as investors grew unwilling to buy home loans once thought safe, starving many lenders of the cash they need to operate normally. Dozens of mortgage lenders have quit the industry this year.