Employees in the mortgage business have been confronted by serious job insecurity in recent weeks. Workers at one of the world’s strongest financial institutions, it turns out, are not immune.
JPMorgan Chase, the biggest bank in the country, is laying off hundreds from its home-lending business, Bloomberg reported. The decision parallels that of other companies in the sector as rising mortgage rates and high home prices cool demand from homeowners.
The exact number of those being laid off is unclear. More than 1,000 workers are affected, but about half are being moved to different divisions within the company, sources told the publication.
“Our staffing decision this week was a result of cyclical changes in the mortgage market,” a company spokesperson said in a statement.
The sector has been hit hard as the Federal Reserve’s decision to boost interest rates has helped push mortgage rates well above where they had been for most of the pandemic.
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At the beginning of the month, mortgage demand dropped to its lowest level in more than two decades. Higher interest rates and home prices and a shortage of homes for sale are driving the decline in demand.
Employees at JPMorgan are far from alone in feeling the effects. Sources told Bloomberg that Wells Fargo, the country’s biggest banking mortgage lender, is also laying off or reassigning employees.
Some of the most drastic layoffs in real estate occurred this month when Compass and Redfin announced hundreds of cuts. Compass’ pare-back amounts to 10 percent of its staff, or about 450 employees, while Redfin laid off approximately 470 employees, or about 8 percent of its total.
There’s no indication JPMorgan’s decision will affect its plans for office space, which involve consolidating locations into a new headquarters. In April, the financial giant revealed its design of a 60-story, 1,388-foot-tall tower at 270 Park Avenue spanning 2.5 million square feet.
The building will be able to house up to 14,000 employees. Construction is expected to wrap by the end of 2025.
[Bloomberg] — Holden Walter-Warner