
Seattle-based WaFd Inc., also known as WaFd Bank, is cutting ties with the single-family mortgage lending sector, a move that's slicing 8% off its workforce. In a tough break for the employees, approximately 174 positions are on the chopping block, as reported by the Banking Dive. The layoffs were announced alongside the bank's earnings for the first quarter of 2025 and include a strategy to "right sizing other support areas," said WaFd CEO Brent Beardall.
In a candid LinkedIn post, Beardall described the day of the announcement as "one of the most difficult days I have had as CEO." Beardall lamented the impact on the employees and their families but maintained a stance of resilience, saying, "I am proud to work for a bank strong enough to acknowledge when the world has changed and bold enough to pivot [accordingly]," as he told the Banking Dive. With this pivot, the bank aims to focus more on business banking and commercial real estate lending while maintaining current home loans and HELOCs on their books, ensuring stability for existing customers.
The Phoenix Business Journal notes that WaFd plans on making annual savings of about $17 million by the end of June as a part of this restructuring. The bank has already taken a $5.4 million charge for this quarter due to the restructuring. Focused on its legacy customers, Beardall ensured that "Importantly, we will retain all existing home loans and HELOCs on our books, ensuring no disruption for our current customers."
Explaining the strategic decision, CEO Beardall highlighted factors such as the commoditization of home loans with nearly 70% of originations being sold to government-sponsored enterprises like Freddie Mac, which he argues has decreased profitability and increased credit risk for banks. Beardall also pointed out the heightened interest rate risk associated with refinanced mortgages, made easier for consumers by advances in technology. The regulatory environment was also cited as a contributing factor, with the bank recently receiving a "Needs to Improve" rating under the Community Reinvestment Act, igniting a plan to appeal, as revealed by the Banking Dive.