The cuts amount to more than 21 per cent of the workforce at Washington Mutual, which ended June with 43,198 employees.
Washington Mutual had been the largest US savings and loan before JPMorgan bought its banking assets for US$1.9 billion (S$576.3 billion), in a transaction arranged by US regulators. The holding company for Seattle-based Washington Mutual later filed for bankruptcy protection.
About 4,000 of the jobs will be cut by the end of January, and another 5,200 later, JPMorgan spokesman Christine Holevas said. The 5,200 workers will receive double their annual salaries retroactive to Oct 1, payable in a lump sum when their employment ends, Ms Holevas said.
Washington Mutual collapsed under the weight of roughly US$176 billion of home equity, adjustable-rate and subprime home loans on its books. It is one of 22 US lenders to fail this year.
Shares of JPMorgan closed on Monday down US$5.54, or 17.5 per cent, to US$26.12 on the New York Stock Exchange.
Bank shares were among the biggest decliners on Monday on expectations the deepening global economic slump will cause credit losses and write-downs to soar. -- REUTERS
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