NYCB’s Flagstar unit to cut around 1,900 jobs

(Reuters) -New York Community Bancorp unit Flagstar Bank will lay off around 1,900 employees, the U.S. regional lender said on Thursday, amid efforts to turn around its struggling business.

Flagstar announced around 700 job reductions and said an additional 1,200 jobs will be cut after it completes the sale of its mortgage servicing unit to non-bank mortgage platform Mr. Cooper .

NYCB said it anticipates finalizing a $1.4 billion sale of the unit to Mr. Cooper in the fourth quarter of 2024, adding that the majority of employees impacted by the layoffs will be able to work for Mr. Cooper.

NYCB came under pressure after it reported increased stress in its commercial real estate portfolio in January, which also rekindled concerns over the health of the sector recovering from the failures of a slew of regional banks in 2023.

NYCB, which on Tuesday said it will rename itself as Flagstar Financial, acquired Flagstar Bank in 2021 for $2.6 billion.