The finance company Amresco Inc. said it will close several units and dismiss 375 employees, or about one-tenth of its work force, by yearend.
The "negative impact of the capital markets crisis over the last 90 days" is spurring the layoffs, Amresco said.
The Dallas-based home equity, commercial, and workout specialist will close a number of retail branches within Amresco Residential Mortgage Corp., its home equity subsidiary.
Amresco fired 160 employees Thursday from its corporate and line-of- business operations.
The company had said it would be scaling down because of market conditions, though the extent of the employee reduction was not disclosed then. It announced Nov. 16 that it would close Amresco Residential Credit Corp., its bulk lending and correspondent division.
And the company said Nov. that 13 it would have a net loss of $50 million to $60 million for 1998 because of a weakened asset-backed and commercial mortgage-backed securities market.
Several specialty finance companies, including FirstPlus Financial Group, Dallas, and United Companies, Baton Rouge, La., announced layoffs in recent months as demand for their asset-backed debt and equity dried up.
"Unfortunately, some of our cost-cutting has had to involve our most valuable asset, our people," said Robert H. Lutz Jr., Amresco's chief executive, in a statement released Thursday. "As painful as the decisions have been companywide, the steps we have taken are necessary for the long- term interest of Amresco."
The cutbacks will result in savings of approximately $34 million, the company said.
The company suffered a "double hit," said Ken Posner, an analyst with Morgan Stanley Dean Witter & Co., since profits fell in the commercial mortgage and home equity securities markets.
The future for specialty finance companies, which have suffered for the past year, is still cloudy, he said, despite improved securitization markets. "It's not getting any easier to compete in any of the niche lending markets," he said.
"Any of the well-capitalized finance companies, like the Associates, The CIT Group, or Household International, are going to clean up," Mr. Posner said, because they have the "scale and balance sheet."
Amresco says it is the largest commercial mortgage banker and distressed asset specialist in the country.