Countrywide plans huge cuts

LOS ANGELES — Struggling lender Countrywide Financial said Friday it will cut as many as 12,000 jobs as it struggles to deal with challenging conditions in the mortgage industry.

The company said the cuts, amounting to as much as 20 percent of its work force, are needed because it expects new mortgages to fall about 25 percent in 2008 from this year's levels.

The job cuts are expected to center primarily on the company's production divisions and its general and administrative support areas, Countrywide Chief Executive Angelo Mozilo said in a letter distributed to employees Friday.

He also called the current market cycle "the most severe in the contemporary history of our industry."

"During the past two years the growth in home-price appreciation has stopped dead in its tracks, and in many areas of the country it has turned in the wrong direction," Mozilo said in the letter.

In recent weeks, the company borrowed $11.5 billion and sold a $2 billion stake to Bank of America so it could keep operating its retail banking and mortgage-lending businesses.

The latest cuts followed the elimination of about 900 positions earlier this week and 500 others last month.

The company employs about 60,000 people, with about 34,000 working in loan production.

IndyMac to shed

1,000 positions

LOS ANGELES — IndyMac Bancorp plans to eliminate as many as 1,000 jobs and slash its dividend by half amid challenging conditions in the mortgage and housing markets that have led to industrywide credit tightening, the company said Friday.

In a letter to shareholders, IndyMac Chairman and Chief Executive Michael Perry warned market conditions are likely to remain difficult in the fourth quarter and into next year. He added that he expects the lender to remain profitable into 2008.

The company expects to cut 10 percent of its staff, or about 1,000 positions, as part of layoffs and a severance program.