JPMorgan Chase to cut 9,200 jobs at Washington Mutual

JPMorgan Chase & Co. said Monday it will eliminate about 9,200 jobs at the former Washington Mutual Inc, which became the largest U.S. bank to fail on Sept. 25.

The cuts amount to more than 21 per cent of the workforce at Washington Mutual, which ended June with 43,198 employees.

Washington Mutual had been the largest U.S. savings and loan before JPMorgan bought its banking assets for $1.9 billion US in a transaction arranged by U.S. regulators. The holding company for Seattle-based Washington Mutual later filed for bankruptcy protection.

About 4,000 of the jobs will be cut by the end of January, and another 5,200 later, JPMorgan spokesman Christine Holevas said. The 5,200 workers will receive double their annual salaries retroactive to Oct. 1, payable in a lump sum when their employment ends, Holevas said.

Seattle will bear the brunt of the cuts, with 3,400 layoffs out of a total of 4,300 Washington Mutual employees in the city, JPMorgan said. Another 1,600 layoffs will be in the San Francisco area, and the remaining 4,200 will be elsewhere.

Most branch workers will keep their jobs. The combined company has about 5,400 branches, and JPMorgan has said it plans to close no more than 10 per cent.

Holevas said JPMorgan has not decided the fate of Washington Mutual's headquarters building in Seattle.

Washington Mutual collapsed under the weight of roughly $176 billion US of home equity, adjustable-rate and subprime home loans on its books. It is one of 22 U.S. lenders to fail this year.

Shares of JPMorgan closed Monday down $5.54 US, or 17.5 per cent, to $26.12 US on the New York Stock Exchange.

Bank shares were among the biggest decliners Monday on expectations the deepening global economic slump will cause credit losses and write-downs to soar.