``In the normal course of business Bear Stearns Residential Mortgage Corp. and Encore Credit evaluate market conditions and staffing levels in an effort to identify areas where we can eliminate redundancies and improve the efficiency of our operations. As a result we have made the decision to reduce our staffing levels and close two operation centers.'' The firm also said the workforce eliminations are also due to a new computer system that ``enables us to more efficiently serve our customers from a central location.''
A person with direct knowledge of the matter who declined to be named estimates the number of jobs cut at approximately 240 – 100 positions in Encore Credit in Irvine, California and 140 positions at Bear Stearns Residential Mortgage Corp. based in Scottsdale, Arizona. The firm’s statement did not contain that information and Renu Aldrich, a spokesperson for the firm, declined to elaborate.
Bear Stearns ranks second in the nation after New York-based Lehman Brothers Holdings Inc. among sellers of mortgage bonds, is the fifth-largest securities firm in the U.S., and the nation's 12th-largest home lender, according to Inside Mortgage Finance.
Lenders across the country are providing fewer mortgages as the housing-industry slump deepens. U.S. home prices will fall this year, the first annual decline since the Great Depression of the 1930s, according to the National Association of Realtors, based in Chicago.
After a decline in the value of mortgage-backed debt forced two Bear Sterns hedge funds into bankruptcy, the besieged firm has seen its shares decline 28 percent this year. Company CEO James Cayne ousted both Richard Martin, who managed the fund unit, and Co-President Warren Spector, who had been in charge of trading and asset management.
Amid rumors that there may be “rescue financing coming in for some of the financials, particularly for Bear Stearns,” according to an industry analyst, the firm’s shares rose $13.29, or 13 percent, to $116.44 at the end of the trading day, the stock's biggest gain since October 1998.