US investment bank Bear Stearns said Wednesday it was merging two mortgage subsidiaries and eliminating 310 jobs to better deal with market conditions related to the ailing housing sector.
In the year to date, Bear Stearns has slashed its workforce in mortgage businesses by 40 percent in moves to weather a broader credit crunch stemming from a crisis in the subprime mortgage sector, where loans are given to people with patchy credit.
Bear Stearns said the merger of Bear Stearns Residential Mortgage and Encore Credit into a single unit "will allow the firm to right-size the business to current market conditions and increase efficiency."
The creation of the new company, called Bear Stearns Residential Mortgage Corporation, entails the loss of 310 jobs across its mortgage lending businesses.
"A hallmark of our franchise has been our ability to adapt to changes in the market environment and product demand," said Tom Marano, global head of mortgages, rates and foreign exchange.
On Tuesday, another Wall Street investment bank, Morgan Stanley, announced the elimination of 600 jobs in its mortgage business, also citing market conditions.
Since the beginning of August, the mortgage sector has shed more than 50,000 jobs, according to the consultancy Challenger, Gray & Christmas.
