WaMu cuts 1,200 jobs

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WaMu, a bank that I consider one of the most under-discussed potential failure candidates as this credit crisis worsens, reported job cuts for 1,200 positions across the country in an effort to reduce costs and trudge back towards profitability.

WaMu has huge exposure to option ARM loans, with a ton of their profit booked as deferred interest “earned” on those loans and some of the smallest loan loss reserves out of any of the big depositories.

From Market Watch on the layoffs:

Washington Mutual said Thursday that it is cutting 1,200 more jobs as part of the lender’s efforts to reduce costs and return to profitability. More than half of the job cuts — 775 positions — are in California and Florida, two formerly booming real estate markets that have been hit hard by the mortgage crisis. Another 270 positions were reduced in Washington state. The cuts are part of a plan WaMu announced in April to lower expenses by $500 million to $600 million, according to a spokesman at the lender. WaMu already cut 3,000 jobs earlier this year as it closed a series of home loan centers. The job losses announced on Thursday affect back-office and support workers.