Bear Stearns cuts 240 jobs at two home-lending units
Our Corporate Bureau
17 August 2007
Mumbai: Bear Stearns Cos Inc, the second-largest underwriter of mortgage bonds, said it is eliminating about 240 jobs at its two home-lending units as a global credit squeeze and a sub prime lending crisis rattled markets around the world.
Bear Stearns will cut 100 jobs at Encore Credit, based in Irvine, California and another 140 jobs at the Bear Stearns Residential Mortgage Corp. division in Scottsdale, Arizona, said a person with direct knowledge of the matter.
Bear Stearns acquired Encore Credit, a sub prime lender, in the past year for about $26 million, the company said. Bear Stearns Residential funds risky sub prime mortgages and Alt-A loans for borrowers with decent credit.
The New York-based investment bank employs about 15,100 people worldwide and said the cuts would not affect Wall Street jobs.
The crisis in the sub prime lending industry had recently forced Bear Stearns to liquidate two of its hedge funds and led to the ouster of co-president Warren Spector. Several US sub prime lenders have either shut down or curtailed operations.
The job cuts follow an evaluation of market conditions and a review of staffing levels in an effort to eliminate redundancies and improve efficiency, Bear Stearns said in a statement.
Bear Stearns is the nation's 12th largest home lender, according to Inside Mortgage Finance. The company, the fifth- biggest US securities firm, ranks second after New York-based Lehman Brothers Holdings Inc. among US sellers of mortgage bonds.