Updated from 5:11 p.m.
American Home Mortgage
is firing more than 6,000 workers as it shutters most of its business.
The Melville, N.Y., mortgage lender said Thursday evening it had "ceased taking mortgage applications and has notified all of its production employees that they will be separated effective tomorrow." The company, which plans to maintain its thrift and servicing businesses, said the move will slash its workforce to around 750 from more than 7,000.
The news comes just two days after American Home told Wall Street it had been cut off by its lenders and was considering alternatives including liquidation. The company said Thursday that it made the move "as it seeks the most appropriate course of resolution to preserve the value of its remaining assets."
reported that the company would shutter its operations Friday after efforts to sell itself failed.
"It is with great sadness that American Home has had to take this action which involves so many dedicated employees," CEO Michael Strauss said in a press release. "The employees affected should understand that this is not a reflection on their efforts or their productivity. Unfortunately, the market conditions in both the secondary mortgage market as well as the national real estate market have deteriorated to the point that we have no realistic alternative."
Shares of American Home, which plunged 84% Tuesday on news the company was considering liquidation, traded wildly Thursday, swinging as low as $1.25 and as high as $4.60 following Wednesday's close at $1.48.
In after-hours trading, shares were off 50% at 72 cents.