American Banker is reporting today that First Horizon will lay off 1,500 employees -- 50 percent of its sales force -- amid a continuing downturn in the mortgage markets. Company CEO Gerald Baker disclosed the plan during a speech yesterday, and said the financial services provider will also close 50 offices as part of its move. An excerpt:
Mr. Baker discussed the pullback during his presentation Wednesday at the Lehman Brothers Financial Services Conference in New York. His company also plans to make cuts in its construction and consumer business as it looks to shrink its $22 billion loan portfolio by $2 billion over the next 12 months. He cited projections by the Mortgage Bankers Association that originations could decline 25% over the next two years. “We think its important to get in front of that, because we think … [the decline in originations] might be greater than that,� he said.
Subscribers can read the full story, and a subscription is recommended. Update: First Horizon has now made a press release available on its Web site concerning its workforce reduction.