Citing the rise in mortgage rates, Citigroup has closed down an Illionois office, laying off around 120 in the process. The Danville, Ill. facility is said to be the beginning of a mass-wave of Citi firings, with numbers projected to total around 2,200 when the smoke clears. This isn’t dissimilar to Bank of America’s projected total firings numbering in the thousands by the end of October. Wells Fargo remains in the lead in terms of potential layoffs, projecting that around 19,000 individuals will lose their jobs by 2014. The Danville operation had only been in existence for around 18 months.
“The Danville facility was originally established to handle the surge in demand for refinancing,” Mark Rodgers, a company spokesperson, told Bloomberg. “However, due to the ongoing decline in refinance volumes, the excess capacity Danville provided is no longer needed.”
Citigroup’s employment numbers have been on the decline since last December, when the company’s staff dipped from 259,000 to 253,000 by mid-year. Back in July, Citigroup CEO Michael Corbat stated, “Although the housing market is gaining strength, the lower volume of mortgage refinancing will impact our consumer business, we’re already taking steps to make sure the mortgage business is sized correctly.”
Mortgage refinancing has dwindled nearly 70 percent as the housing market makes strides toward economic recovery. Mortgage applications, on the whole, are at a five-year low, as well, impacting the industry as a whole, leading to the elimination of jobs across the board. Ironically, these massive mortgage industry layoffs come after the "Big Three" banks posted record profits during an outstanding second quarter.