GMAC to Close Offices, Cut ResCap Jobs

GMAC Financial Services will close 200 GMAC Mortgage retail offices and cut 5,000 Residential Capital employees, or about 60% of its work force, in a bid to cope with the downturn in the credit and mortgage markets.

The company is also considering its options for the GMAC Home Services business and the noncore servicing operation.

"While these actions are extremely difficult, they are necessary to position ResCap to withstand this challenging environment," said ResCap chairman and CEO Tom Marano. "Conditions in the mortgage and credit markets have not abated and, therefore, we need to respond aggressively by further reducing both operating costs and business risk."

ResCap expects to take a charge of $90 million to $120 million for eliminating 3,000 of the jobs and the related initiatives. Potential charges for the remaining 2,000 workers being let go haven't been determined.

ResCap will continue to originate loans in the U.S. and internationally where there is a secondary market to sell the loans.