Washington Mutual Inc. said Thursday it will lay off 1,200 employees, or about 2.6% of its workforce, in cuts to be carried out over the remainder of this year.
The Seattle thrift company, reeling from steep mortgage losses, has already shed about 3,000 employees this year as it shuttered 186 home loan centers.
A spokeswoman confirmed the latest round of cuts at Wamu Thursday, saying they would be spread across several departments.
Late Wednesday, the $320 billion-asset Wamu said it would cease offering negative amortizing home loans, a product set that has produced exceptionally high default rates for Wamu and other companies.
Some of the cuts will be tied the elimination to these loan products, spokeswoman Olivia Riley said. “We’re making a number of changes to … accelerate our return to profitability,” she said.
The job cuts are designed to eliminate about $500 million in expenses this year, the company said.
Wamu, which posted a $1.1 billion first-quarter loss, announced in April that it had raised $7 billion in capital from a group of investors led by TPG Inc. of Fort Worth. Wamu is holding a special shareholder meeting Tuesday in Seattle to vote to increase the number of shares of common stock and to permit the conversion of preferred stock issued in the capital raise.