The pace of job losses in mortgage lending slowed in December, as some companies shifted workers to other areas of financial services, but the losses may pick up again in the new year as the U.S. housing market continues to weaken and credit remains tight.
The government said on Friday that 7,000 jobs were lost in December in credit intermediation, a Bureau of Labor Statistics (BLS) category that includes mortgage lending and related activities. That follows a drop of 13,000 jobs in November.
Job losses since the industry's peak in February 2007 now total 79,000 people. By comparison, the U.S. construction industry has lost 236,000 jobs since its peak in September 2006, the BLS said.
Executives at staffing companies that provide temporary and permanent workers to the industry are divided over whether the worst is over.
I'm sure all the write-downs haven't (yet) been taken by the financial services firms, but it suggests that they've made the adjustments on the employment side that are going be required, said Tig Gilliam, chief executive of Adecco North America. Adecco is the world's biggest staffing firm.
Some Adecco clients have reallocated resources, but only diversified companies have that flexibility, he said.
I had a client who took exactly the same number of jobs from a call center focused on mortgage sales and moved them to credit card, Gilliam said. Companies that are solely focused on the mortgage arena won't have that opportunity.
U.S. mortgage lenders have been cutting jobs in recent months to lower costs and react to tightening credit conditions. Countrywide Financial Corp has said it would cut up to 12,000 jobs. Earlier this week, National City Corp slashed its dividend and announced 900 job cuts.
Also cutting jobs in the past year were Washington Mutual Inc and Lehman Brothers Holdings Inc.
People with specialized skills cannot easily be moved to a different department, said Robert Morgan, co-president of recruitment and talent management at Hudson Highland Group Inc.
You can't absorb that all at once, Morgan said, adding that the bulk of layoffs have probably already been announced.
Banks have been pretty aggressive, at least that's what we're hearing from the banks, he said. They've taken aggressive actions in 2007 so they can start 2008 out fresh and clean.
Carl Camden, chief executive of Kelly Services Inc said he expects further job cuts in the sector in coming months.
Following the news on declines in mortgage applications, declines in credit applications, the crunch and so on, I had thought the decline (would be) greater than it was, he said.
Until you see reports of a turnaround in new home sales or sales of old homes, and in credit activity, I think you'll see a continued slow decline in that sector.
(Editing by Gary Hill)