90% layoff at American Home Mortgage
August 3, 2007It had been clear all week that American Home Mortgage was in trouble, just how deep the trouble was revealed late yesterday. Apparently they could not find a way out of the mortgage mire, nobody to fund or buy them up. So they’re laying off 90% of the employees, essentially everybody involved in their mortgage-writing business. They’re going from a 7,000-employee company to just 750.
That sounds to me like a fatal blow. I mean when you’re laying off that many people you’re going to wind up with empty office buildings, tons of unused PC hardware and software licenses, all of that you have to carry on your books until you can unload it. The costs for that kind of layoff must be massive, it’s going to be a mess. I just don’t see how a company survives.
And it’s not like the remaining employees are going to be feeling great about their futures either. There’s going to be an exodus even among the remaining few. It would be easier and kinder to everyone involved if they just liquidated now.