Banking

JPMorgan lays off hundreds in mortgage business after rate surge

JPMorgan Chase is laying off hundreds of home-lending employees and reassigning hundreds more this week as rapidly rising mortgage rates drive down demand in what had been a red-hot housing market. 

The total affected will be more than 1,000 workers, with about half moved to different divisions within the biggest U.S. bank, according to people familiar with the matter who asked not to be identified discussing personnel matters. 

“Our staffing decision this week was a result of cyclical changes in the mortgage market,” a JPMorgan spokesperson said in a statement Wednesday. “We were able to proactively move many impacted employees to new roles within the firm, and are working to help the remaining affected employees find new employment within Chase and externally.”

The cuts follow the Federal Reserve’s decision to boost interest rates to tame decades-high inflation. Last week, the Fed announced an increase of 75 basis points, the biggest hike since 1994. Thirty-year mortgage rates have already more than doubled from their record low in January 2021.

Read more: Mortgage Surge Toward 6% Slams Brakes on Red-Hot Housing Market

Firms including Compass and Redfin have also been laying off workers as the U.S. housing market cools. Compass said in a regulatory filing last week that it will trim about 10% of its workforce, or about 450 employees, while Redfin plans to cut about 6%, amounting to roughly 470 workers.

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