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National City, Lehman to lay off 2,150

September 07, 2007|From Times Wire Services

Lehman Bros. Holdings Inc. and National City Corp. announced plans Thursday to lay off a combined 2,150 workers, the latest in a flurry of job losses in the mortgage industry.

Lehman said it would cut 850 employees, or 3% of its workforce, resulting in a $20-million after-tax charge against earnings. The move came two weeks after the Wall Street investment bank decided to close its Irvine-based BNC Mortgage sub-prime unit, resulting in 1,200 layoffs.

National City, the ninth-largest U.S. bank, is laying off 1,300 workers and scaling back its mortgage business, resulting in a $200-million pretax charge.

The Cleveland-based bank said it would make fewer loans that it couldn't sell to mortgage finance giants Fannie Mae and Freddie Mac. The bank also stopped issuing home equity loans through brokers.

National City had already significantly reduced its mortgage exposure last year, when it sold its First Franklin Financial Corp sub-prime unit to Merrill Lynch & Co. for $1.3 billion.

Thursday's cuts were announced a day after Countrywide Financial Corp., the largest U.S. mortgage lender, announced 900 job cuts on top of 500 disclosed Aug. 20.

Lehman shares fell 52 cents to $53.83 and are down 31% this year. National City shares slid 66 cents to $26.67. They are off 27%.

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