JPMorgan Chase & Co. said Monday it will cut a total of 9,200 jobs at Washington Mutual, which it acquired Sept. 25 after Washington Mutual became the nation's largest bank to fail amid the ongoing credit crisis.
Of the 9,200 jobs being eliminated as JPMorgan integrates Washington Mutual, 4,000 will be cut by the end of January, a JPMorgan spokesman said. The remaining 5,200 employees will remain with JPMorgan through a transition period, but will lose their positions by the end of 2009.
Those 5,200 employees who stay on as transition workers will receive double their salary retroactive to Oct. 1 until their last day on the job, and be entitled to severance packages, the spokesman said.
Washington Mutual had between 41,500 and 42,000 employees nationwide when JPMorgan took over the bank at the end of September. The 9,200 positions represent more than 20 percent of that total.
JPMorgan acquired most of Washington Mutual's assets from federal regulators in September after the Seattle-based bank failed amid the ongoing credit crisis that saw other banks struggle as well, such as Lehman Brothers Holdings Inc., which filed for bankruptcy protection, and Wachovia Corp., which agreed to be sold to Wells Fargo & Co.
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.