CALBASAS, Calif. and WASHINGTON — Countrywide Financial announced late Friday that it would layoff as many as 12,000 workers, nearly 20% of its workforce, in an effort to trim costs in a down mortgage market. IndyMac Bancorp, another large lender also said it would trim 1,000 employees, or 10% of staff to save money.
The Labor Department released the jobs report on Friday as well, marking a loss of 4,000 in August and also revised downward previously released figures for June and July. The one-two punch sent a chill up Wall Street's spine, as the Dow fell 250 points and analysts clamored for The Federal Reserve to cut the discount rate again as a reassuring signal to the turbulent credit market. Capping a bad week was the continuing news of record numbers of home foreclosures as reported by the Mortgage Bankers Association. The June quarter was the third consecutive reporting period with record-setting negative numbers.
The Federal Reserve released its "Beige Book" before the layoff and jobs reports. The Beige Book found little disruption in economic activity from the mortgage market meltdown.
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