WaMu cutting 3,400 Seattle-area jobs, 9,200 total

JPMorgan Chase & Co. is eliminating the jobs of 3,400 Washington Mutual employees in the Seattle area, part of 9,200 job reductions nationwide, a spokesman said Monday.

Outside of Seattle, where WaMu is based, the biggest number of job cuts is 1,600 at credit card call centers in San Francisco and Pleasanton, Calif., and layoffs are generally no more than a few hundred in other areas, JPMorgan spokesman Thomas A. Kelly said.

None of the more than 20,000 workers in branch banks are being cut, he said.

"Our branch staff is not changing at all," Kelly said. "We need all the branch personnel we have now."

Washington Mutual, the nation's largest savings and loan, collapsed in September and was acquired by JPMorgan for $1.9 billion. It was the nation's largest bank failure in history.

WaMu had between 41,500 and 42,000 employees nationwide at the time, and the 3,400 Seattle-area layoffs amount to about 80 percent of the bank's local work force, leaving about 900 workers, mostly at branches.

Earlier Monday, JPMorgan chief executive James L. "Jamie" Dimon met here behind closed doors with about 200 WaMu employees from retail branches. His visit came on the final day of WaMu pink slips, although "the vast majority were notified previously," especially in the last two weeks, Kelly said.

Dick Conway of Dick Conway & Associates, an economist and regional economic forecaster, said the job losses underscored his prediction that the four-county region that includes Seattle will have fallen into recession by the end of the month.

King, Pierce, Snohomish and Kitsap counties already have been hard hit by the construction and homebuilding industry collapse, making layoffs in other sectors especially painful, "but this one doesn't appreciably affect the (regional) forecast," Conway said.

The WaMu jobs being eliminated are almost entirely white-collar positions ranging from executives, managers and supervisors to less highly paid workers in areas where JPMorgan staff can assume the added load, Kelly said.

Kelly said 4,000 positions nationwide, including 1,500 in the Seattle area, will be gone by the end of January while another 5,200, including 1,900 in the Seattle area, will help with the transition to the new ownership, with some work extending through the end of 2009.

All are getting severance packages based on longevity under WaMu policies, and transition workers are being paid at twice their previous rate until their jobs end, he said. The Seattle Times quoted unnamed bank sources as saying that severance consists of five weeks' pay for each of the first two years of service and two weeks' pay for each succeeding year.

"The transition employees are helping us move from WaMu computing systems, accounting systems and branding to the Chase brand," Kelly said.

The extra pay for transition staff will cushion the impact of the layoffs "but will not in the end prevent it," Conway said.

Loss of the WaMu headquarters in the 55-story Washington Mutual Tower will likely boost the downtown Seattle office vacancy rate, especially as new buildings that were started before the economic tailspin are completed, he added.

Washington Mutual was weighed down by its deep exposure to the crumbling mortgage market, which has been the hardest hit area of the markets since the middle of 2007. As mortgages increasingly defaulted beginning in 2007, Washington Mutual was forced to set aside billions of dollars to cover losses.

Shares of JPMorgan fell $5.54, or 17.5 percent, to $26.12 Monday as the broader market tumbled as investors continue to worry about the sagging economy.

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AP Business Writer Stephen Bernard in New York City contributed to this story.