• JPMorgan is cutting staff from its home lending unit, the company confirmed Wednesday.
  • More than 1,000 employees will be affected, with half leaving the company, Bloomberg reported.
  • The move follows similar downsizing at Wells Fargo as the Fed aggressively hikes borrowing costs.

JPMorgan is reducing the size of its home-lending department in response to slowing demand for mortgages and refinances, the company confirmed Wednesday.

The decision will affect more than 1,000 workers, Bloomberg reported, citing multiple people familiar with the matter. About half will be reassigned, and half will leave the company, according to the news outlet.

"Our staffing decision this week was a result of cyclical changes in the mortgage market," a JPMorgan spokesperson said in a statement to Insider. "We were able to proactively move many impacted employees to new roles within the firm and are working to help the remaining affected employees find new employment within Chase and externally."

Home purchases and, more importantly, refinance activity have both plummeted as a result of higher borrowing costs due to aggressive rate hikes by the Federal Reserve.

Mortgage rates have doubled since last year, climbing from a historically low 3% to about 6%, erasing about a third of homebuyers' purchasing power and eliminating the opportunity for many homeowners to lock in a lower rate.

Earlier this year, similar layoffs took place at Wells Fargo, the nation's largest home lender among US banks, after the bank reported mortgage revenues had fallen 33% from the first quarter of 2021 to 2022.

Wells Fargo CFO Mike Santomassimo attributed the decline "primarily due to lower refinance activity."

At JPMorgan, mortgage origination volume fell 31% from $43.2 billion in the first quarter of 2021 to $30.2 billion in the first quarter of 2022, per company filings.

If you are a JPMorgan employee affected these developments, please get in touch with this reporter via email.

Read the original article on Business Insider

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