No account executives will be affected by layoffs at Merrill Lynch's subprime mortgage unit. The cutbacks follow similar moves at subsidiaries of rival investment banking firms.
The layoffs occurred last week at First Franklin Financial Corp., spokesman Bill Halldin told MortgageDaily.com today.
"We've adjusted our staffing levels to be in line with current business conditions," Halldin said. "First Franklin has been successful for over 26 years because of its ability to adjust to changing market conditions."
The job cuts involved loan processing and support functions, he said, noting they do not affect account executive positions.
Halldin declined to comment on the number of workers affected and their location, as well as how many employees remain at First Franklin.
In a phone interview last week, Halldin neither denied nor confirmed a rumored 50 percent staff reduction at the San Jose, Calif.-based subprime lender, saying only, "We do not comment on blog postings, rumors or speculations."
Kevin Callori, spokesman for the California Employment Development Department, said neither First Franklin nor Merrill Lynch have filed a Workers Adjustment Retraining Notification as of today. He noted not all companies are covered under WARN, which requires employers with staff of 75 or more to give notice 60 days in advance of a plant closing, layoff or transfer of 50 jobs or more. Workers must have been employed for at least six of the 12 months preceding the date of required notice to count.
Merrill purchased the subprime lender's origination and servicing platforms from National City Corp. for $1.3 billion on Dec. 30, 2006.
In March, First Franklin said it was consolidating some branch operational functions and adjusting staff levels by increasing in areas and decreasing in others," which included hiring account executives. During this year's first quarter, Merrill had a net increase of 4,100 in full-time staff mainly due to First Franklin's acquisition, according to an announcement.
Other investment firms that have recently laid off mortgage employees include Lehman and Bear, which have respectively disclosed mortgage job layoffs of at least 2,450 and 240 this year.
Lehman Brothers cut 400 jobs when it combined the operations of BNC Mortgage LLC and Aurora Loan Services in June. It also laid off 1,200 people when it closed BNC in August and cut another 850 jobs in September when it announced a further restructuring of mortgage operations.
Last month, Bear Stearns & Co. laid off 140 employees of Bear Stearns Residential Mortgage Corp. and 100 from Encore Credit, which were in part due to closure of two of the subsidiaries' operations centers in Pennsylvania and Virginia, respectively.