Bank is reducing its workforce by 8%
Flagstar Bank, a division of New York Community Bancorp (NYCB), is cutting 700 jobs, accounting for about 8% of its total workforce, as part of its ongoing restructuring efforts.
In addition to these layoffs, the bank has also confirmed that an additional 1,200 employees are expected to be impacted by the sale of its residential mortgage servicing unit, which is set to be completed by the end of this quarter.
Flagstar has offered assurances that many of these workers will have the opportunity to transfer to the buyer, Mr. Cooper.
The sale of the mortgage servicing unit is just one of the many steps Flagstar is taking to reposition itself within the market. The bank operates over 400 branches, with roughly 90 private banking teams located in over 10 cities in the metropolitan New York City region and on the West Coast.
Read more: Mr. Cooper to acquire Flagstar's mortgage-servicing unit
“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,” Flagstar CEO Joseph Otting said.
As part of the overhaul, NYCB plans to officially adopt the Flagstar name later this month, a move that aligns with its efforts to unify its operations under a single brand. This rebranding followed an earlier revamp of the bank’s branches and services, aimed at modernizing the company and enhancing its presence in the market.
Otting, who took the reins as the bank faced scrutiny over its exposure to New York commercial real estate, has overseen efforts to stabilize the company. NYCB’s challenges have been compounded by falling stock prices and the need for a capital injection, which came in part from investors led by former Treasury Secretary Steven Mnuchin.
“We've diversified our business model, established relationship-driven businesses, and continue to recruit top-tier talent with expertise in advancing our vision,” Otting said in a statement. “Our new company name complements the re-branding of the bank and our branches we implemented earlier this year. This name change is a continuation of those efforts and unifies the company and our vision into a single brand."
Prior to the job cuts, Flagstar Bank expanded its leadership team in commercial and private banking, bringing in several senior executives to bolster its expertise in these areas.
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