Washington Mutual may cut 4,000 jobs

October 23, 2003

Associated Press
King 5 News

SEATTLE - Washington Mutual Inc., the nation’s biggest thrift, may cut the equivalent of 4,000 full-time jobs out of 22,000 in home loan operations nationwide, chief executive Kerry K. Killinger said.

In a conference call Wednesday, Killinger also told investors and analysts the move is among the cost-cutting efforts amid a downturn in mortgage business since the end of low interest rates that brought a surge of applications, overtime and use of temporary workers.

“We now have an opportunity to become more aggressive in eliminating redundancies and trimming costs throughout the organization,” Killinger said. “Reducing the overall cost structure will be vital to driving our earnings growth in 2004.”

Washington Mutual also has lowered the rates it pays on some accounts, he added.

On Sept. 30 the company announced several changes in top management to try to prevent a repeat of the customer service problems that marred an aggressive expansion over the past year and a half.

Washington Mutual, based in Seattle, has 59,100 employees, including 8,170 in the Seattle area. The bank cut 1,500 jobs between August, when loan applications peaked, and the end of September.

The prospect of further cuts was announced a day after Washington Mutual announced a 10 percent increase in earnings per share for the three months ending Sept. 30 and a one-cent increase in cash dividends to 41 cents a share.

At the same time, the company reported that home loan applications fell by half during the third quarter. Interest rates are now about one percentage point higher than in June.

Despite the downturn, Killinger said Washington Mutual continues to anticipate rising profit through the end of next year and the addition of at least 1 million accounts a year. In the third quarter the company added about 230,000 accounts.


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