IndyMac to Cut 24% of Its Workforce

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Mortgage lender IndyMac Bancorp Inc. said Tuesday that it will cut its workforce by 24 percent, laying off 2,403 employees in a bid to cut costs as it tries to stay solvent amid a slumping economy and a dismal housing market.


The Pasadena-based lender said in a filing with the Securities and Exchange Commission that the job cuts include a significant staff reduction, mainly in India.


“This action is clearly painful, but it is necessary in our drive to return IndyMac to profitability soon,” Chief Executive Mike Perry said in a memo to employees.


IndyMac said the cuts were essential because the company still faces weak demand for home loans on the secondary market and tighter credit markets, making it more difficult to lend to potential homebuyers.


This announcement comes after IndyMac allowed 1,600 workers to leave last year through voluntary resignations.


IndyMac also said it would take a pre-tax charge of about $25 million related to severance and other expenses in the first quarter. IndyMac added that it expects to save $136 million annually in labor costs and savings related to vacated real estate.


“The bottom line is that these savings are essential in our drive to return IndyMac to profitability soon,” Perry said.


Shares in IndyMac closed down 5.7 percent to $4.49 Tuesday in trading on the New York Stock Exchange.

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