IndyMac (IMB) , the Alt-A lender ravaged by the mortgage meltdown, is cutting nearly a quarter of its workforce.
The company plans to cut 2,403 jobs, or 24% of its overall staff. The layoffs come on top of 1,600 jobs cut in a program begun in September.
IndyMac's emphasis on so-called Alt-A loans, a riskier mortgage given to candidates who don't have solid documentation, sent it reeling last year as delinquencies rose and the secondary markets melted down. CEO Mike Perry, in a letter posted to a company news Web site Tuesday, said conditions have worsened since the last round of job cuts.
Specifically, Perry said, the secondary market for loans remains "virtually frozen," while government-sponsored entities such as
have tightened their standards for taking on mortgage-backed securities amid their own capital troubles.
"While IndyMac continues to have a significant capital cushion and strong liquidity, we need to make sure that that remains the case going forward, and, therefore, we have needed to take steps to make sure that our balance sheet does not grow significantly as a result of non-GSE loans (primarily plain vanilla, prime jumbo home loans) that we originate but cannot sell in the secondary market," Perry said.
Amid these troubles, IndyMac has further cut back on its offerings, and it now expects 2008 volume to tumble to $43 billion from $78 billion in 2007 and $92 billion in 2006.
This article was written by a staff member of TheStreet.com.