Countrywide to cut jobs

By Joann Groff  joann@theacorn.com

The nation's largest mortgage lender will hand up to 12,000 of its employees pink slips in the next three months in an effort to stay afloat during the home-loan crisis.

After cutting 900 jobs earlier this month and 500 in August, Countrywide Financial Corp. announced last week that up to 20 percent of its nationwide work force could be laid off.

"We are taking decisive action to ensure that Countrywide continues to be well-positioned for further success," said Angelo Mozilo, the company's chairman and chief executive, in a statement.

The news came before the Federal Reserve Board cut interest rates by a half-percent on Tuesday, surprising financial experts who widely predicted only a quarter-point cut. The unanimous vote to drop the rate produced the first cut in four years.

The announcement has many wondering whether the new rates will affect Countrywide's job cuts, but it's still not clear if fewer employees will be let go. Calls to the company on Tuesday were not returned.

"Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time," Fed policymakers said in a post-meeting statement.

Headquartered in Calabasas, Countrywide has offices nationwide, including in Westlake Village, Thousand Oaks and Simi Valley.

A recorded message on Countrywide's press line states: "We are not prepared to break out potential regional impacts." The recording alluded to questions about which areas would be hit hardest by the layoffs.

The cuts were made in conjunction with predictions that new mortgages will fall 25 percent in 2008 compared to this year.

"As we carry out our plan, the company's overarching focus is exactly where it has always been: to remain an industry leader in the U.S. residential lending business," Mozilo added.

Recently, the company borrowed $11.5 billion and sold a $2-billion stake to Bank of America in order to continue running its banking and mortgage lending services.

"Bank of America's investment in Countrywide represents a vote of confidence and strengthens our balance sheet, enabling us to position Countrywide for future growth and success," Mozilo said.

Countrywide's current work force exceeds 60,000.