Flagstar Bancorp Inc., the holding company for Flagstar Bank, has implemented an organizational restructuring to reduce expenses and enhance profitability.
As part of the initiative, the company says it will reduce staffing levels across the organization by approximately 600 positions from its Sept. 30, 2013, headcount level.
Flagstar says the restructuring is in light of the current operating environment and is consistent with its previously communicated strategy of optimizing its cost structure across all business lines.
Flagstar expects the restructuring will generate annualized cost savings of approximately $40 million when fully implemented by the end of the first quarter of this year. The company expects to incur a pre-tax charge of approximately $5.2 million related to this restructuring.
‘In 2013, we made important progress in resolving certain legacy issues, and we are now focused on further strengthening our financial and operational foundation,’ says Alessandro DiNello, president and CEO. "The decision to downsize our workforce was not made lightly but is a necessary step on the path to achieving the company's long-term goals." He notes that the changes will not have an impact on its clients.