Fidelity Reduces Full-Time Workers by 115, a 15% Cut

Still struggling to return to profitability, Glendale-based Fidelity Federal Bank said that it has laid off 115 workers since September, cutting its full-time work force by 15%, and that more layoffs could be on the way.

Fidelity, which reported a net loss of $8.23 million in the third quarter that ended Sept. 30, has trimmed its full-time staff from 765 employees to 650, with most of the cuts in the savings and loan’s mortgage banking department, Senior Vice President Neil Osborne said.

“We don’t anticipate any more cuts of that magnitude,” he said. “But we are trying to continue the streamlining process we’ve been going through.” Further cuts might involve “two or three (employees) in one area, two or three in another area,” Osborne said.

Unwilling to match discounted, “teaser” interest rates offered at the beginning of mortgage loans by other S & Ls, Fidelity has stopped competing for loans originated by mortgage brokers, Osborne said. As a result, Fidelity laid off 65 employees in its mortgage banking department, said Osborne, who added that Fidelity still makes mortgage loans through its 33 branches in Southern California.

About 10 employees were laid off from the S & L’s credit department, which is responsible for management of problem assets, after Fidelity sold almost $200 million in non-performing assets in the third quarter. An additional 40 employees were laid off when Fidelity sold nine branches, Osborne said.

Sale of the branches and the layoffs will save Fidelity about $5 million per year, Osborne said.