JPMorgan is reportedly eliminating up to 8,000 jobs, including about 6,000 in its mortgage division, and is lowering its profitability target.
According to a Reuters report, about 5,000 of those positions will be eliminated this year. The cuts will bring the bank's global workforce to about 260,000.
The bank, however, plans to add up to 3,000 new jobs in its control function, including areas like compliance, the report states.
The newly announced job cuts would bring the total planned number of positions eliminated at the bank in 2014 to 17,000, according to the report. Other big banks, including Wells Fargo and Bank of America, have been laying off mortgage workers in droves during the past year as purchase and refinance volume falls on higher interest rates and rising home prices.
Mortgage lending at JPMorgan fell 8% in 2013 to $166 billion, but refinancing fell three times as much, according to the report.
Earlier this month, JPMorgan announced a $614 million settlement with the U.S. Department of Justice, U.S. Department of Housing and Urban Development (HUD), U.S. Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA) over faulty mortgages that were sold to those agencies – thus resolving one of many legal actions the bank faces stemming from the financial crisis.
In addition to the cash penalty, the bank agreed to enhance its quality control program for loans that are submitted in the future to FHA's Direct Endorsement Lender program.
The settlement also releases JPMorgan from False Claims Act, FIRREA, and other civil and administrative liability for FHA and VA insurance claims that have been paid to the bank since 2002, through the date of the settlement.
In November, JPMorgan and the U.S. Department of Justice finalized a $13 billion settlement over alleged ‘faulty’ mortgages the bank sold to investors and pension funds in the lead-up to the financial crisis.
The civil settlement, which came after months of negotiations, resolves several state and federal investigations into JPMorgan's sale of mortgage-backed securities to investors from 2005 through 2008. It is reportedly the largest settlement ever reached between a financial firm and the U.S. government.
For more about the newly announced job cuts, as well as adjustments to the bank's profit forecast, check out the Reuters report.