Seattle Times: JPM to Cut ~70% of WaMu HQ Employees

According to today’s Seattle Times, JPMorgan Chase plans to cut around 70% of WaMu’s Seattle-area employees.

JPMorgan is handing out layoff notices now and is expected to finish making decisions about all of WaMu’s 43,200 employees nationwide by Dec. 1.

As many as 3,000 of WaMu’s 4,200 workers in Seattle could lose their jobs, according to current and recently departed WaMu executives who spoke on condition of anonymity.

“It’s pretty dire for Seattle,” said one former high-ranking executive.

The layoffs will leave gaping holes in downtown Seattle’s commercial real-estate market, where WaMu occupies more office space than any other company.

With no other major banks headquartered here in Seattle, I wonder where all these newly jobless banking professionals will be able to find work.

I’d like to extend my condolences to those that are affected by these cuts, which are likely to include some of my friends. Sure, we were right about the housing bubble, but nobody likes to see people lose their jobs.

Best of luck to the soon to be former WaMulians.

(Melissa Allison & Eric Pryne, Seattle Times, 11.19.2008)

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

79 comments:

  1. 1
    Ken says:

    They need all that space for 4200 workers?

  2. 2
    newbie says:

    When i was looking for a job 1.5 years ago I interviewed at redfin, zillow and my current employer. All 3 have had layoffs! It would be ineresting to see how many companies have had layoffs…..this would be an interesting poll =).

  3. 3
    Dave0 says:

    My friend works at WaMu and it doesn’t seem like that bad of a situation at all. he’s been told (unofficially) that he can keep his job if he moves to NYC, but he doens’t want to do that. As a result, they’ve been encouraging him to job hunt while at work. So instead of working, he’s been spending every workday applying for new jobs and scheduling interviews, while still on salary. On top of that, he has 60 days from when he gets the official notice (which he hasn’t gotten yet) before he gets laid off. After that, he gets 3 months of severance pay, so he figures he’s got at least 5 months of full pay before he has to start worrying about money. He’s already gotten an offer to be a contractor at Microsoft (he works in WaMu’s IT dept) where he would get paid more than he does now, but he’s contemplating waiting for something better (or taking a month long vacation before accepting another offer).

  4. 4
    deejayoh says:

    He’s already gotten an offer to be a contractor at Microsoft (he works in WaMu’s IT dept) where he would get paid more than he does now, but he’s contemplating waiting for something better (or taking a month long vacation before accepting another offer).

    I would tell your friend to jump on that MS offer. CSG roles are disappearing left and right. Probability of it being there in 5 months is low to non-existent

  5. 5
    MacAttack says:

    “I would tell your friend to jump on that MS offer. CSG roles are disappearing left and right. Probability of it being there in 5 months is low to non-existent”

    And there’s no such thing as a “permanent” job, either. HR staff are cautioned to use the term “regular” so as not to imply a contract of employment.

    Interesting dilemma. At least JPM is being decent about it.

  6. 6
    vboring says:

    I wonder if JPM is offering to cover relocation expenses (like short sales) for employees moving to NY.

  7. 7
    Scotsman says:

    Lots of finance people already on the street here and in other money centers such as NY. Those jobs are flooded with applicants. People with IT, marketing, and other non-finance skills may find it easier.

  8. 8
    vboring says:

    WaMu is leaving town and MSFT has frozen hiring.

    My guess is that Boeing and Starbucks are in similarly protective modes, since both are distinctly bellweather companies.

    Are there any big employers left in the area that are actually looking to employ people?

  9. 9
    Joel says:

    Jones Soda is basically toast. I have a friend that works there that is basically not counting on having a job within 1 year.

  10. 10
    The Tim says:

    Dangit, no. I already lost Mother’s Cookies. I don’t think I could handle losing Jones Soda, too.

    Curse you, housing bubble. Curse you.

  11. 11
  12. 12
    David McManus says:

    Can we finally put a spear through the heart of the “Seattle is special” argument? I haven’t seen any comments of the sort lately and I think most of “those people” are on permanent hiatus.

  13. 13
    David McManus says:

    The cuts at Boeing are in the Witchita, Kansas facility, not locally.

  14. 14
    patient says:

    “My friend works at WaMu and it doesn’t seem like that bad of a situation at all”

    That has to be the exception. Being laid off together with 3000 collegues in the beginning of a fat recession where your industry is in the very epicenter is bad, very bad. I feel very sorry for all these people whereof I’m sure the majority had nothing to do with making decisons to peddle crappy loans and did not collect huge bonuses. For those who did, shame on you for contributing to the layoff of your collegues.

  15. 15
    SeattleMoose says:

    This does not bode well for all those downtown condos…..there are going to be a flood of sales driving prices down even more. The “perfect storm” scenario is quickly materializing for Seattle (even Ballard).

    The only silver lining is that all the WAMU execs (e.g. Kerry Killinger) who steered the company onto the rocks will remain millionaires and will weather the storm just fine.

    At least we have accountability in this country….otherwise we’d be just another bananna republic.

  16. 16
    Joel says:

    I haven’t seen any comments of the sort lately and I think most of “those people” are on permanent hiatus.

    I just got an email from a Realtor not 1 hour ago that said that Seattle is “very different”. And to not get caught up in national news.

  17. 17
    David McManus says:

    Joel, I hope you responded with a “No thanks, I don’t do business with delusional people.”

  18. 18
    Plymster says:

    As for WaMu folks relocating to New York, what will they do with their condos and homes here? Sell (in this market? – are you nuts!?!) or rent (in this market? – are you nuts!?!). A lot of people will be geographically trapped by their homes, or they’ll just be losing money each year on the mortgage as they try to rent.

    The downside of the Housing Bubble is not just the loss of jobs in Financial, Real Estate, Retail, Hospitality industries, etc. The true downside lies in the lack of geographical mobility of a large portion of the population. This will hamper the ability of people and industries to bounce back in different geographical locations.

  19. 19
    deejayoh says:

    Dow closes under 8000. Think that was a pretty significant support level, no?

  20. 20
  21. 21
    Brad says:

    I wonder if many of the remaining 30% fall into the “you still have a job…in NYC” category. The carnage from the standpoint of Seattle’s local economy could be actually be a lot worse than 70% job losses.

  22. 22
    Dan C says:

    A deal is basically done for Russell Investments to take a majority of the headquarters, while JPM keeps minimal operations on a couple of floors. BAD NEWS for Tac-Town.

  23. 23
    Joel says:

    He also claimed that prices will start increasing soon, bottom fishers will only recognize the bottom when it’s too late and that you’ll be sorry if you don’t buy some kind of real estate really quickly. He came to this conclusion through his frequent study of statistics trends, and facts. I replied simply asking how soon prices will tick up.

    Okay, I posted the email in it’s entirety in the forums.

    [link fixed by editor]

  24. 24
    rent for now says:

    Notice how JPM cut jobs too. This will be happening to some WFC folks with the WB merger. (I don’t expect to have work in 6 months.)

  25. 25
    matthew says:

    I had support on the DOW at 8200. We had 3 reversals at the 8200 levels but breached today after 1 midday reversal attempt. I believe the next level of support is 6800.

  26. 26
    patient says:

    My guess is that this whole mess will result in a certain level of protectionism. If a company wants access to the US market they will be required to produce a certain(high) percentage of their US sales in the US. I would welcome such a plan. If the big 3 are allowed to fail I think it could happen real fast.

  27. 27
    Curtis says:

    Wamu layoffs hopefully bring additional 5% drop to house prices addition to plus 15% I still expect as an adjustment to our paychecks. So should I expect a 20% more price down in 09 2nd quarter??

  28. 28
  29. 29
    Dave says:

    Don’t forget Rosetta (Merck branch) is shutting down. From what I heard all scientific staff gone by the end of 2008 and they keep the lights on (and not much else) until the end of 2009. 300 jobs (and several very well compensate ones).

    I think that really does stick a fork in the Biotech Hub argument. Amgen not hiring (and shrinking), Zymo shrinking, etc, etc.

    Dave

  30. 30
    alex says:

    DOW below 7k!

  31. 31
    softwarengineer says:

    MOVE TO NEW YORK?

    I read a recent article on the financial folks exit from New York in droves due to the DOW and NASDAQ collapse. Financial jobs are drying up there like the Sahara Desert. How’d you like to be a recent college graduate with a business degree right now? Or with the Big Three tanking; an engineering degree? How about an experienced worker laid off who made 6 figures, when they don’t even want to pay 5?

    On the lighter side, Horsey had a great cartoon on the solution for the economic meltdown:

    And it reminds me of the brainless stand on continued globalism and uncontrolled growth.

    It asks a “Quiz” question: “How do we solve the economic meltdown?”

    A. Have Paulson throw trillions of dollars at the banks.

    B. Have a witch doctor dance on one leg and say incantations.

    C. If you can’t decide between “A” or “B”; you’re on to the solution…..

  32. 32
    Jillayne says:

    oh-my-god is what I said to myself when I saw the 3,000 number. This is going to hurt. Someone emailed me an MSN article this morning that named Seattle as the number one place to survive the recession. I wonder if they’ll be revising that article.

  33. 33
    buystocks says:

    Plymster,
    I was pondering what you said. Another take is that people will realize that positive cash flow is more important than holding onto a devalued asset. Meaning, people will sell(or walk away from) their houses at market value to allow moving to get a job(cash flow).

  34. 34
    TheyHadAVision says:

    C’mon people! Let’s give these guys a break. They had a vision for something great and they tried their best to make it happen. Not every business succeeds, in fact almost many fail. They had the guts, the vision and the nerve to be great.

  35. 35
    Joel says:

    They had the guts, the vision and the nerve to be great.

    Yes, let us celebrate the guys that had the vision to put untold numbers of people into loans they cannot afford and sell the loans to other people as AAA grade investments.

    At first it was debt == wealth, now it’s evil == greatness.

  36. 36
    Flotown says:

    has inventory been rising for the last month or so and if so, anyone find that odd?

  37. 37
    Blabber says:

    Not every business succeeds, in fact almost many fail

    We are not talking about a friggin’ start-up here! WaMu was founded in 1889 (5 months before Washington state); it takes a lot of stupidity and incompetence to bring down a company as established as that.

  38. 38
    Matthew says:

    They had the vision to give everyone with a pulse a loan! Wow, let’s applaud them!

  39. 39
    Ubersalad, Ph.D says:

    Anyone else notice Tim’s tone on his posts is becoming more and more egoistic and full of sadist sarcasm?

    Perhaps it’s just me.

  40. 40
    The Tim says:

    Wow I am really confused here. Which part comes across to you as egoistic and sadistic sarcasm?

    I think this might be an example where tone is easy to misread online. I was trying to be totally genuine here. Job losses suck for everyone involved.

  41. 41
    adele says:

    November 19, 2008 8:31 AM

    Microsoft shareholder meeting: Ballmer expects much slower hiring this year and next

    Posted by Benjamin J. Romano

    Microsoft CEO Steve Ballmer, speaking at the company’s annual shareholder meeting in Bellevue this morning, said the economic downturn will certainly have an impact on the company’s business.

    The company is looking at every aspect of its business for opportunities to reduce costs; utilize resources more efficiently, and “much, much slower growth, particular in headcount, for the remainder of this financial year and, I suspect into the next financial year,” Ballmer said.

  42. 42
    pat says:

    A lot of these people should have left a long time ago. I got laid off there last December. I interviewed internally and had opportunities, but my gut told me to leave.

    These people saw it coming and they should have left!

    A lot didn’t leave because they were sure they would not get the salaries they had attained while the business was booming. Managers with maybe high school diplomas who talked sweet and guys who developed databases (Access) who were untrained hacks.

    There were a LOT of great people there. Don’t get me wrong. I’m speaking about why some people didn’t leave – they might have a hard time getting that sweet salary.

    P

  43. 43
    Some Guy says:

    A friend of mine working in a financial division of MSFT said that his group was taking advantage of the situation by hiring some former WAMU employees. I say “was” because they aren’t hiring at all anymore.

  44. 44
    Curtis says:

    Purpose of this page is to educate people for the bubble and not to repeat the same mistakes. A little bit toning helps if people will understand this way. Even today my RE called me and told me Seattle is more resistive and I couldnt stop myself screaming her..
    I think Tim is doing great so far and many people in Seattle who had no past housing experience like me saved hundreds of thousands dollars with this website. (but i did not donate a single penny to his website – YET!)

    Let’s give him the toning credit at least..

  45. 45
    Jane says:

    Its really sad that JP is announcing layoffs.

    Though many people are happy to say “Seattle is no longer Immune”, I still feel seattle is a great place and real estate is going to pickup in the next few months.

    With such low prices now is a really good time to buy a home. Going with a honest and experiened real estate agent is very critical in this market.

  46. 46
    bitterowner says:

    Jane, are you on crack? The housing market will recover “in the next few months”? Exactly what fantasy world are you living in? This is only the beginning….

  47. 47
    Ray Pepper says:

    “going with an honest and experienced real estate agent is very critical in this market”

    You were thinking these guys too right Jane?

    http://www.youtube.com/watch?v=3_Z3LucrHOg&feature=email

    I’m sorry I just had to…………

  48. 48
    microsofties says:

    #8 – Just for the record, MSFT hasn’t “frozen” hiring…There are 4 open headcount in my organization that we are interviewing candidates for, so get your facts straight. NOT EVERY GROUP INSIDE MSFT HAS STOPPED HIRING. Stop believing everything the media flaunts or wants you to believe.

    To everyone else:

    It’s nowhere close to an apples/apples comparison when you put MSFT in the same sentence as companies like Boeing, Starbucks, WaMu, or any other Fortune 500 in the Seattle areas. The only similarity is they all have major operations in the state of WA.

    The day that MSFT announces layoffs will be the darkest day we’ll see in this debacle, so pray that doesn’t happen.

    I can buy the “Seattle isn’t special” argument, but there is only one MSFT.

  49. 49
    Herman says:

    Get ready for an RE bloodbath on Bainbridge Island. BI population = bankers and lawyers.

  50. 50
    Alan says:

    Is that you in that commercial, Ray?

  51. 51
    jon says:

    “Which part comes across to you as egoistic and sadistic sarcasm?”

    I’m feeling fussy so I’ll take a crack at that.

    The problem is that sarcasm is used so frequently here that it forms an expectation in the mind of a reader. It may have also formed a habit in your writing. So when we see a statement like

    “With no other major banks headquartered here in Seattle, I wonder where all these newly jobless banking professionals will be able to find work.”

    Several things pop out. “newly jobless” is an odd phrase because the word new implies something fresh and welcome. There are other uses of the word, but the intended effect is to create a contrast with the default usage. “Banking professionals” is problematic, because most of the people who work at WaMu are not specialists in banking. They can do HR, accounting, IT, or whatever at a wide range of companies. So back to “I wonder,” it suggests you aren’t really wondering, but in fact making some other point, because if they are really are just bankers, then the statement implies that they are doomed. In that context, saying “I wonder” is a bit sarcastic.

    Not a biggie, but in the overall context of the blog whose stated purpose is to refute the public statements of RE professionals, the onus falls on the writer to make it clear that a statement is to be an exception to the writers usual style.

  52. 52
    Ray Pepper says:

    No Alan. Comcast made us use an actor. The commercial cost 1000 to produce 2 years ago. It was filmed in Bellingham. Currently it only plays to 173000 homes in Tacoma and Federal Way Zones on CNBC with Jim Kramer of Mad Money and my favorite Fast Money with Dylan Ratigan 12-4pm daily.

    Or you can watch it over and over on U Tube. I still say I could have done the “head-knocker commercial” but Comcast insisted on this guy.

  53. 53
    Jillayne says:

    PJ at HousingWire has a good story on WaMu’s servicing division tonight. Fitch reamed them for lack of oversight and then downgraded their servicer rating.

    http://www.housingwire.com/2008/11/19/at-wamu-a-lack-of-oversight/

  54. 54
    The Tim says:

    Jon @ 51,

    Fair enough, although I admit that I thought that the phrases “I’d like to extend my condolences” and “best of luck” would be sufficient to set the tone of the post in the realm of “serious.”

    I’ll work harder next time and try to be more conscious of that. Thanks for the feedback.

  55. 55
    Bob says:

    I just ran into a pretty funny clip on You tube
    http://www.youtube.com/watch?v=bNmcf4Y3lGM

  56. 56
    buystocks says:

    Why do people think microsoft will be immune to this recession. Doesn’t common sense dictate that their sales will drop, and to keep their profit margins they will need to cut cost by laying people off. Unless, of course, they have designed and manufactured their own pink pony…

  57. 57
    Yesler Hill says:

    Businesses are already heavily cutting back on new equipment – new and upgrade software can’t be far behind? And that’s not just MSFT, that’s Adobe too, etc.

  58. 58
    old_b says:

    Any ex-WaMu (Chase) employees dumping a house? If you need to move away and need to sell badly enough, just shout.

  59. 59
    greenthum says:

    The Tim:

    There are many people in Seattle who thought this could never happen and they hate to be proven wrong. For that reason I believe Jon@51 is reading far more into your article than is actually there.

  60. 60
    Sniglet says:

    The day that MSFT announces layoffs will be the darkest day we’ll see in this debacle, so pray that doesn’t happen.

    I like Microsoft a lot, but it will not remain immune from the massive global downturn that is picking up speed. If the company is already feeling the impacts of the credit crunch and looking for ways to cut costs (as the CEO is publicly stating), then the pressure to cut costs will become even more intense if the economic environment becomes even more dire.

    I’ve said here before that I don’t believe there will be ANY major Seattle employers who avoid lay-offs by the end of 2009. Whether they will call them such is another matter. Some firms might shut down whole departments, or divisions, deemed to be unprofitable, thereby claiming they are not laying people off. In the end, however, they will still be reducing over-all head count.

    Let’s put it another way: no CEO of a publicly traded company will still have a job if they don’t significantly reduce overhead when revenue contracts. And Microsoft will wind up seeing an outright contraction in revenue just like everyone else will (i.e. not just a slow-down in growth).

  61. 61
    Matthew says:

    “There is only one MSFT”

    Thank God for that.

  62. 62
    Matthew says:

    speaking of MSFT:

    http://www.cnbc.com/id/27821495

    “Microsoft Thursday filed plans with securities regulators to tap the debt markets, raising money to pay for working capital, share buybacks, or other types of general corporate expenses.”

  63. 63
    Herman says:

    isn’t msft sitting on a pile of cash? Companies in that position often choose to use it in downturns to give themselves a big advantage coming out of the downturn.

  64. 64
    Matthew says:

    Herman,

    Yes and I imagine that something big may be coming.

  65. 65
    Tim says:

    “The day that MSFT announces layoffs will be the darkest day we’ll see in this debacle, so pray that doesn’t happen.”

    MS doesn’t do official layoffs. They just screw people and push them out the door at review time. I’ve seen it happen a lot and know someone in HR who basically confirms this.

  66. 66
    deejayoh says:

    MS doesn’t do official layoffs. They just screw people and push them out the door at review time. I’ve seen it happen a lot and know someone in HR who basically confirms this.

    That’s not true. You should ask your HR friend what a “RIF” is – because they do happen. I know of several examples.

  67. 67
    Buceri says:

    Computer sales will go down; IT spending will go down; MSFT numbers will go down.

    Even supermarkets see lower sales in slow downs, and people need to eat!!!

  68. 68
    Tim says:

    I know they do RIF’s but they ususally aren’t large scale. I think the review process is where they tend to quietly keep headcount numbers in line. Many testers who had never received a poor review score were suddenly given 2.5’s after the XP ship and amid the push to automation for the Vista cycle. I saw an entire lab clear out this way.

  69. 69
    deejayoh says:

    So it was unexpected that Vista testers got 2.5’s after the product shipped?

  70. 70
    jonness says:

    “It’s pretty dire for Seattle,” said one former high-ranking executive.

    Apparently so. I took my GF out to dinner in Seattle last night. I picked up a newspaper, and was a bit surprised to learn that Seattle had the biggest decline in home sales in the nation. Things are getting ugly around here in a hurry. It appears we are just starting into the “official” recession. Thus, prepare for it to get a lot worse.

  71. 71
    patient says:

    You have one guy let’s call him Florida who start drinking copious amounts of alchohol and shortly after crashes and gets admitted and treated for acute alchohol poisioning. You have another guy lets’ call him Seattle who increases his alcohol consumption gradually and after quite some time starts coughing blood and seeks medical attention. Who is the sickest and who recovers first? It’s not always the most spectacular cases that ends up in worst shape.

  72. 72
    Joel says:

    Sheesh, even Ballmer has said MSFT won’t be immune from this downturn. I’m sure there is still hiring going on where there are people leaving (e.g. for retirement, moving to a different job, etc.). That’s different than adding to existing headcount.

  73. 73
    Lake Hills Landlord says:

    Sniglet,

    What is your definition of “major employer”? And I assume you mean King County, not Seattle proper? I might have a candidate for one that won’t do layoffs. But I do agree that most will.

    It wouldn’t surprise me to see Microsoft dump 8000 people worldwide before this is over.

    Yes, I said it. 8000 people would hardly be a haircut for MSFT, even if many of you think it would be the end of the world. It would be a good opportunity for them to refocus on profitable or soon to be profitable ventures, slim down their core groups, and get out of some non-performing gambles they took trying to reinvest their cash pile.

    It would probably shake our local economy badly since so many seem to believe MSFT is propping this whole area up, but long term I think it would be good for business as laid off employees start new businesses and spread the talent around.

    And just think about how much better 520 traffic could get. ;-)

  74. 74
    Joe Morris says:

    Good job on the site, The Tim.

    I wish I came to your site earlier! I bought in December, 2007. Have no plans to go anywhere anytime soon and have the savings to pay off the mortgage if it comes to that, but would’ve been nice to buy now or maybe in a year or so.

    Good luck to everyone.

  75. 75
    anon says:

    “I might have a candidate for one that won’t do layoffs.”

    Costco? That’s what I was thinking anyway.

  76. 76
    silver9 says:

    Well I will add a comment about the snarkiness.

    “Sure, we were right about the housing bubble, but nobody likes to see people lose their jobs.”

    When I read this line, I was put off. It turns your sincerity into a “I told you so”. There are hundreds of posts about how we were right about the bubble; all you needed to say here was:

    “nobody likes to see people lose their jobs.”

    I love the blog but there are days when I feel the tone has changed. On the other hand I understand that it is hard to write a blog – people interpret things in a way you did not intend and other times one isnt even aware of their own feelings which can come out in a post. There can also be a desire to add an opinion to a post that is best as just news/facts.

    Keep up the good work. Living in Seattle and working at Microsoft, this community is my safe haven of reality.

  77. 77
    Thomas B. says:

    Well I will add a comment about the snarkiness.

    Funny… the hypocrisy is thick with this one.

  78. 78
    jon says:

    I just was reminded of this:

    http://www.hulu.com/watch/13187/office-space-door-salesman

    I can’t wait for the movies about the mortgage disaster.

  79. 79

    […] is even more than the estimates we heard just a few weeks ago, when anonymous WaMu executives were cited in a Times report that said “as many as 3,000 of […]

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