JP Morgan Chase & Co. has decided to lay-off their employees who are working in its mortgage business. Furthermore, the bank has announced that decision will affect more than 1,000 employees. However, they will relocate about of these employees at different divisions within the bank.

U.S. economic crunch

High inflation and mortgage rates is slowing the housing boom across the United States. Therefore, JP Morgan & Chase which is the largest bank in the United States has decided to lay-off hundreds of employees. “Our staffing decision this week was a result of cyclical changes in the mortgage market. We were able to proactively move many impacted employees to new roles within the firm and are working to help the remaining affected employees find new employment within Chase and externally.” JPMorgan’s spokesperson said in a statement to Insider.

High interest rate and declining mortgage business

Last week, the Federal Reserve announced an increase of 75 basis points in the interest rate. This is the highest increase since 1994. Mortgage rate rose from 3% to 6% since last year. In addition, the inflation within the United States is also sky-rocketing and scare of recession is looming around. Hence, this has also plummeted home purchasing and refinancing activity. In May, existing home sales tumbled to a two-year low as the average house prices jumped to a record high. The effect of financing has forced the bank to reduce the size of its mortgage team.

Other lending companies are also laying-off workers

JP Morgan Chase & Co. is not the only company which has laid off its employees. Earlier, Wells Fargo which is the nation’s largest home lender laid off several of its employees. Moreover, the bank reported a loss of 33% in mortgage revenues since last year. Similarly, Redfin Corp. and Compass Inc. are also laying-off their workers in wake of declining housing market. Compass has decided to reduce at least 10% of their existing workforce. Whereas, Redfin plans to cut about 6% of their total workforce.

According to its latest quarterly filing with the U.S. Securities and Exchange Commission, JP Morgan is employing 273,948 workers worldwide.

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