Washington Mutual has announced its intention to discontinue all lending conducted through its wholesale channel and the closure of all of its freestanding home loan centers and sales offices.
The company said that it will also close or consolidate certain loan fulfillment centers. These actions are expected to result in the elimination of approximately 2,600 to 3,000 positions. They will further advance the company’s retail-focused home lending strategy, initiated in 2007 when the company took steps to direct its home lending origination activities through its core retail banking network.
In connection with these actions, the company estimates that it will incur a pre-tax restructuring charge of approximately $140 million to $180 million, comprised of approximately $40 million in termination benefits, approximately $80 million to $110 million in lease termination and other decommissioning costs and approximately $20 million to $30 million in fixed asset write-downs.
The company estimates that of the total estimated pre-tax restructuring charge, approximately $120 million to $150 million are expected to result in future cash outlays. The restructuring actions are expected to be substantially completed by September 30, 2008.