WaMu Slashes 1,200 Jobs

The struggling thrift now has reduced headcount by more than 7,000 since the onset of the credit crunch.
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Washington Mutual

(WM) - Get Report

eliminated an additional 1,200 employees on Thursday, designed to improve expense management and assist the company as its struggles to return to profitability.

The additional workforce reduction brings the total drop in headcount to the nation's largest thrift to 7,350 employees as the housing crisis continues.

The job cuts include staff from essentially three categories: support positions in core areas, such as retail banking; more positions in its home loans business; and centralizing other support functions such as technology and human resources positions, the company confirmed on Thursday.

Further cuts may be necessary, the Seattle-based company said.

"We're continuing to refine our business," a spokeswoman said.

WaMu shares -- down more than 80% from a year earlier -- and other mortgage-focused banks, including

Wachovia

(WB) - Get Report

and

National City

(NCC)

, have been socked by the housing crisis, credit crunch and ensuing economic downturn.

The company said at the end of last year that it was significantly downsizing its home lending unit and eliminating roughly 3,150 positions between its home loans staff and corporate support positions. At the time, it had also said it was slashing its dividend and raising $3.7 billion in capital through a preferred stock offering, but the moves were not enough. As loss projections mounted, WaMu ended up in April agreeing to a $7.2 billion capital injection led by private equity firm TPG and other large institutional investors. Around the same time it also announced an additional 3,000 layoffs in its home loans staff.

WaMu has exited the subprime loan business altogether and effectively retooled its home loans business, now only originating mortgages through its retail branches.

Separately, WaMu said on Wednesday that it has discontinued offering any negative amortization loan products, including the once popular "pick-a-pay" mortgages, or pay-option adjustable rate mortgages.

"Our core set of products will continue to meet the home purchasing and financing needs of qualified borrowers, while also recognizing the current mortgage lending environment," a second WaMu spokesman said.

WaMu continues to offer fixed rate mortgages, hybrid amortizing adjustable-rate mortgages, hybrid interest-only adjustable-rate mortgages and home equity products for purchases or refinances.

Shares of WaMu closed up 9 cents, or 1.4%, to $6.35 Thursday.