THE BASIS POINT

WAMU To Cut 1600 Bay Area Jobs

After being taken over by the FDIC and sold to JP Morgan Chase for $1.9b, WAMU announced that it is closing its Pleasanton campus and cutting about 1600 jobs in the Bay Area:

The bank’s East Bay call center, where roughly 1,200 workers answer customer inquiries about credit cards and consumer banking, will close by early spring, company spokesman Gary Kishner said. The company will cut 400 employees at its operations center at 201 Mission St. in San Francisco early next year, leaving about 60 workers there until the site shuts down in late 2009.

There are no planned job cuts at the company’s larger facility in the city, at 123 Mission St. Kishner stressed the changes won’t affect customers because no regional retail operations will be affected and the call center functions will be handled elsewhere. More than 11,000 employees will continue to work in California, and nearly 700 state branches will remain open under the Chase name next year.

Washington Mutual’s collapse was the largest in U.S. banking history. The Seattle thrift became trapped in the same financial thicket that ensnared a number of financial institutions in recent months: loan portfolios loaded with subprime and adjustable-rate mortgages that turned bad in soaring numbers as housing prices flattened and fell. The worsening news triggered a crisis of confidence, with customers yanking nearly $17 billion in deposits during about a 10-day period in September.

JPMorgan Chase of New York took over the bank’s branches, deposits and loans in a $1.9 billion deal engineered by the Federal Deposit Insurance Corp.

In addition to setting about 1,600 people scrambling for work, the consolidations will dump around 350,000 square feet of commercial space onto a local market already awash in sublease space, based on a list of WaMu space compiled by Los Angeles brokerage firm CB Richard Ellis Group Inc. All told, the company occupies more than half a million square feet of space around the Bay Area.

The news comes on the heels of Citigroup Inc.’s announcement earlier this week that it would cut 53,000 jobs, which is likely to translate to at least hundreds of lost positions across the Bay Area. Financial giants that have recently filed for bankruptcy, been taken over by a competitor or the government, or have swallowed firms themselves, control at least 4.2 million square feet of office space around the region, according to CB Richard Ellis Group. That includes 2.4 million square feet in San Francisco, where the vacancy rate has been steadily rising throughout the last year.

“Next year, we’re going to have the sublease swap meet of the century,” said David Klein, a partner with San Francisco brokerage firm NAI BT Commercial. “Sublessors competing for the same tenant (will) all say, ‘I can do the deal cheaper than you,’ and the landlords will be playing catch-up. It’s the harsh reality of a recession.”
Big hit to Pleasanton

Steve Falk, CEO of the San Francisco Chamber of Commerce, said the job cuts in the city are unfortunate, but he noted that many more would have occurred were it not for the Chase takeover.