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Pacific Northwest Bank layoffs include 43 on Whidbey
A decision by Pacific Northwest Bank to hire out mortgage lending will mean about 80 people will lose their jobs, including 43 employees in the Oak Harbor office.
Chuck Foisie, the bank's executive vice president, said Pacific Northwest Bank is joining a growing list of financial companies that are outsourcing residential mortgage lending operations. Big companies like Bank One Corp., Mellon Financial Corp. and Merrill Lynch have already taken this step.
Pacific Northwest Bancorp, formerly InterWest, will still offer residential loans to customers, but the bank's holding company will outsource the mortgage origination process. The corporation expects to reduce the costs of processing, underwriting and closing mortgage loans to the tune of about $3.5 million next year. That comes with an anticipated revenue reduction of about $2.1 million the same year.
Foisie said laying off the employees in several departments was "a very painful business decision," but the bank is doing what it can do to lessen the blow on the families involved. He said the company has hired an employee assistance service company to help those people find new jobs.
No employees at South Whidbey branches of Pacific Northwest Bank will be laid off.
One of the factors that led to the decision, Foisie said, was that now is "a very good time for people in residential lending to find a new job." With historically low mortgage rates, the real estate lending business is red hot.
The layoffs are effective at the end of the year. Those who are losing their jobs account for more than a fifth of the bank's 216-person workforce in Oak Harbor.
City leaders are distressed about the job losses. Oak Harbor Mayor Patty Cohen said the news of the losses was "clearly disturbing" for the city, especially in the current economic situation. She said city leaders have been "tightly focused on building and enhancing the overall business environment" of the city, and any major layoffs just make that harder.
One of the reasons the city is trying to encourage business growth is because the city's budget, which relies partly on sales tax, has been severely crunched by citizen initiatives and the economic downturn over the last few years. While it's not the end of world, the loss of what Cohen characterizes as "living wage jobs" means less money to circulate.
Priscilla Heistad, the Oak Harbor Chamber's executive director, said the layoffs are a pretty big deal for Oak Harbor.
"That's a lot of people for Oak Harbor," she said, "considering some of our biggest employers have about 100 people."
Heistad said she expects the job losses to have some effect on local small businesses. While some people may be able to find other jobs in the area, she said others are bound to move away.
On the brighter side, Heistad said the layoffs may be an opportunity for some folks to start businesses of their own in town.
"We live in a desirable place to live," she said, "but the job market is tough, which is why there are so many home-based businesses here ... You have to create your own opportunities."