It’s been reported that First Horizon is laying off 1,500 employees and closing 50 offices nationwide due to continuing mortgage market woes.
CEO Gerald Baker outlined the plan during his presentation to analysts at a Lehman Brothers conference in New York yesterday, citing a significant decrease in loan origination has forced the mortgage lender to make major changes.
First Horizon is attempting to be proactive, as opposed to taking a “wait-and-see” approach which could lead to more losses as a result of the ongoing secondary mortgage market debacle.
As part of the restructuring, the lender plans to dump about $2 billion from its $22 billion loan portfolio while also cutting back in its construction and consumer businesses.
The mortgage layoffs will result in about a 50% reduction to the current staff.
Baker noted that the top half of the mortgage sales force originate 75% of the business, and therefore cutting the bottom 50% makes sense.
The jobs are slated to be cut by early 2008.
A little over a week ago the Memphis based First Horizon had denied claims of layoffs.