Irvine-based ECC Capital Corp., parent company of mortgage financier Encore Credit, on Tuesday said it would cut 17% of its workforce nationwide.
The subprime mortgage lender said it will lay off 170 people. ECC employs about 580 people in Orange County and 1,265 in all.
It’s the second round of job cuts for the company this year. In January, ECC said it would lay off 440 workers. ECC said it had no plans for more job cuts.
On Monday, ECC said its senior management would take pay cuts. ECC’s co-chief executives, Steven Holder and Shabi Asghar, said they would work without a salary or bonus for the next year.
The company’s chief financial officer and chief administrative officer said they would take 20% pay cuts.
The moves are part of the company’s efforts to reduce expenses,saving as much as $35 million.
In February, ECC said it wouldn’t pay a first-quarter dividend,another sign of shrinking profits for some subprime mortgage lenders.
Like other subprime lenders, ECC has seen profits crimped by rising interest rates, which push up what lenders pay to buyers of mortgages packaged and sold as bonds. Meanwhile, rates on loans haven’t kept pace.
ECC raised $354 million in the county’s largest initial public offering last year. It now counts a market value of about $148 million.
