Mortgage lender Flagstar Bank has been undergoing significant restructuring since its acquisition by New York Community Bancorp in 2022.
Recently, the bank announced a workforce reduction as part of its strategic transformation plan.
The reduction of about 700 employees is part of New York Community Bancorp’s ongoing merger, including its acquisition of $38.4 billion in assets from the liquidated Signature Bank last year.
“We want to express our appreciation for our employees’ contributions,” says Joseph Otting, Chairman, president and CEO of New York Community Bancorp, in a release. “Their hard work and dedication have been greatly appreciated, and we approached this decision with empathy and compassion for everyone affected.”
“As part of our commitment to a profitable future, we launched a transformation strategy earlier this year to drive change throughout the organization,” Otting says. “This includes strengthening our management and Board, redefining our operational plan for improved efficiency, and enhancing our credit oversight and risk framework.”
“While these strategic actions involve difficult decisions, including impacts on jobs, we believe they are essential for strengthening our financial foundation and building a more agile, competitive company,” Otting adds. “This will enable us to focus on strategic investments in other areas and better serve our clients and shareholders, ensuring long-term sustainability and profitability.”
“We have made significant progress this year and will continue to pursue opportunities to optimize our operations and enhance efficiency, paving the way for a more resilient and successful future.”
In addition, Flagstar Bank anticipates finalizing the previously announced sale of its mortgage servicing and third-party origination business to Mr. Cooper in the fourth quarter.
This transaction will result in a further reduction of approximately 1,200 employees, the majority of whom will be offered the opportunity to transfer to the buyer, facilitating a smooth transition and ensuring continued employment.
“These reductions will not impact our service or progress; in many cases, roles were similar or duplicative,” Otting says. “By right sizing our team after bringing three banks together, we are optimizing our operations to move forward with strength and clarity. We remain committed to building a diversified, leading regional bank and positioning our company for long-term success, and though challenging, this is another step in that journey.”
Flagstar Bank operates over 400 branches, including a significant presence in the Northeast and Midwest and locations in high growth markets in the Southeast and West Coast.
In addition, the bank has approximately 90 private banking teams located in over 10 cities in the metropolitan New York City region and on the West Coast, which serve the needs of high-net worth individuals and their businesses.