Latest News by Industry
• Hundreds more to be reassigned as demand for home loans cools
• Largest US bank cites ‘cyclical changes’ in mortgage market
JPMorgan Chase & Co (NYSE: JPM) is laying off hundreds of employees from the home-lending division and reassigning hundreds more this week, Bloomberg reported on Wednesday, citing people familiar with the matter.
The report said more than 1,000 US employees would be affected, with about half moved to different divisions within the bank, as rapidly increasing mortgage rates are driving down demand for new houses in what had been a red-hot market.
“Our staffing decision this week was a result of cyclical changes in the mortgage market,” a JPMorgan spokesperson told Bloomberg in a statement.
“We were able to proactively move many impacted employees to new roles within the firm and are working to help the remaining affected employees find new employment within Chase and externally.”
The layoffs and reorganization follow the Federal Reserve’s decision to hike interest rates to tame decades-high inflation.
Last week, the Fed raised the short-term benchmark interest rate by 75 basis points, the biggest hike since 1994.
Thirty-year mortgage rates have already more than doubled from their record low in January 2021, and have started to cool the housing market that reached a frenzy during the pandemic.
Wells Fargo & Co (NYSE: WFC), the biggest mortgage lending bank in the US, has also been laying off and reassigning employees in its home-lending division, the report said.
Picture Credit: Investopedia
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