Reporting from New York — JPMorgan Chase & Co. said Monday that it would cut 9,200 jobs at Washington Mutual Bank, which it acquired Sept. 25 after WaMu became the nation’s largest bank to fail amid the continuing credit crisis.
The most cuts will come at Washington Mutual’s Seattle headquarters, where 3,400 pink slips are going out, and at the bank’s San Francisco center, where 1,600 jobs are being eliminated, JPMorgan spokesmen said.
The other 4,200 firings will be spread throughout the United States, with fewer than 300 in Southern California, they said.
No branch closures are planned in California as JPMorgan integrates Washington Mutual, so retail customers in the state will continue to see the same faces as always, the spokesmen said.
About 4,000 of the jobs will be cut by the end of January, a spokesman said. The remaining 5,200 employees will stay with JPMorgan through a transition period but will lose their positions by the end of next year.
Those 5,200 employees who stay on as transition workers will receive double their salary retroactive to Oct. 1 until their last day on the job, and be entitled to severance packages, the spokesmen said.
Washington Mutual had 41,500 to 42,000 employees nationwide when JPMorgan took over the bank.
JPMorgan acquired most of Washington Mutual’s assets from federal regulators in September after the bank failed amid the credit crisis that saw other banks, such as Lehman Bros. Holdings Inc. and Wachovia Corp., struggle as well.
Lehman filed for bankruptcy protection, and Wachovia agreed to be sold to Wells Fargo & Co.
Washington Mutual was weighed down by its deep exposure to the crumbling mortgage market, which has been the hardest hit area of the markets since the middle of 2007. As mortgage defaults increased, Washington Mutual was forced to set aside billions of dollars to cover losses.
Shares of JPMorgan fell $5.54, or 17.5%, to $26.12 on Monday as the broader market tumbled.
Times staff writer E. Scott Reckard contributed to this report.
December 2, 2008
Source: Los Angeles Times