Fremont General Corp. said Monday that it has notified all 2,400 employees in its sub-prime lending unit that they may lose their jobs by May 18.

The Santa Monica-based lender did not specify how many of the 2,400 jobs would be eliminated, saying only that “many” employees have been put on paid leave. The embattled lender has been shopping the troubled unit but said it plans to exit the business whether it finds a buyer or not.

“The company continues to aggressively pursue its options with respect to its business,” Fremont said Monday in a statement. “Given the uncertainty of this situation and its impact on employment, the company has given notice of termination to these employees on leave.”

Earlier this month, Fremont was sent a federal cease-and-desist order from the Federal Deposit Insurance Corp., telling the company to tighten its credit policies.

The move is largely procedural, being that state law required employers to give 60 day notice for “a plant closing or mass layoff.”

Last week, Fremont announced that it was delaying the release of its 2006 earnings due to increased volatility in the sub-prime lending market.

Fremont also said last week that Credit Suisse AG extended its credit limit by $1 billion, in a move to shore up its finances and smooth the transition from the subprime sector.

Fremont has said it will continue to operate its profitable commercial loan business and its retail banking division.

Shares in Fremont closed down 83 cents, or 9 percent, Monday at $8.07.