JPMorgan Chase & Co. announced plans to lay off about 21% of Washington Mutual Inc.'s employees by the end of 2009 as it weaves the thrift's operations into its retail-banking network.
JPMorgan, which acquired Wamu in September for $1.9 billion after it was seized by the government, told employees yesterday that it will lay off 4,000 workers by the end of January, according to JPMorgan spokesman Tom Kelly. Another 5,200 are being asked to stay on through various dates in 2009 to help with the deal's integration.
Seattle-based Wamu had 43,198 employees as of June 30. JPMorgan Chief Executive Officer James Dimon and Charles Scharf, who runs the bank's retail operations, met with employees and local officials in Seattle on Monday.
Many of the layoffs come from Wamu's home town of Seattle and two operations centers in California. Some 1,500 workers in Seattle received notice on Monday that they will be laid off in 60 days.
That came on the heels of 1,600 employees in Pleasanton, Calif., and San Francisco who received notice last week that they will be laid off by next spring. Workers who are being asked to stay on for a period of time will receive double their usual salary.
The rest of the layoffs will be sprinkled throughout Wamu's presence across the country.
The cutbacks announced on Monday aren't likely to be the end of the layoffs that will be associated with the Wamu deal. That is because the figures don't take into account the hundreds of retail branches that are expected to be shuttered in coming months. Shares of JPMorgan fell $5.54, or 17.5%, to $26.12 in 4 p.m. composite trading on the New York Stock Exchange.