Do bill collector phone calls factor in to who gets laid off? I received a short one-line email the other day that said, “Go after them because their calls at work cost me my job.” The law says you can tell calls not to call you at work, and theoretically all calls will cease. Employers are cutting back in a bad economy. Some employers are simply looking for an excuse.

When I was in college one radical professor made an interesting point. To prevent future lawsuits, according to the professor, if a black employee is fired the company should fire the weakest white person as well. If a woman is fired, according to the professor, the company should fire the weakest male employee. The practice immediately puts a stop to discrimination claims.

Does your company have a policy about phone calls at work? How do phone calls effect your security clearance, ability to handle money, or overall trust within the company? Even cashiers are effected, regardless of whether their cash drawer balances to the penny at the end of the day. Why? Because companies often look for excuses to replace employees.

My years of hiring and firing taught me that honesty is the best policy. If an employee was arrested, or served a subpoena at work for non-payment of child support, it should be noted. Such events are a reflection of character. All employees are expected to project a reflection of the company, and are a reflection of company policy.

One mortgage servicer says they will not stop phone calls at work unless the debtor faxes a cease and desist letter. Does this practice jeopardize your job? Do phone calls automatically classify you as the ‘weakest’, and the next target?

The best way to protect yourself is to as your employer how you stand amongst your peers and subordinates. See if you can get a written review. It will not prevent layoffs when a company is downsizing, but certainly might prevent surprises.

Your direct value to the company is based on many factors. Good decision making, productivity, and ability to interact with others is paramount. If you are receiving debt collector phone calls at work you should immediately take action. Either directly or indirectly you must make sure the calls do not classify you are expendable.

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At one time companies held worker’s hours to 39-1/2 per week, preventing them from being full time employees. The practice has been around for decades. Today we look at others – those not counted in unemployment numbers.

Because the methods to gather unemployment haven’t kept pace with changes in the workforce, self-employed or freelance workers aren’t counted as laid off even if they lose most of their income. Over the past decade or so, many companies staffed up using more such outside workers to cut their costs for health-care and retirement benefits and to give them more flexibility to expand or contract with business. That flexibility, of course, means that assignments or pay are now shrinking for many of those people.

For the first time, unemployment reached 10 percent or higher in six states, by the spring of 2009. My brother and I have said for years that actual unemployment is much higher than government figures indicate.

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J.P. Morgan Chase told investors today, February 26, 2009, that it will cut 14,000 jobs, up from a previously announced 9,200 in December.

The bank is seeking to cut costs as the deepening recession fuels unemployment and loan losses. The bank anticipates quarterly losses this year of $1 billion to $1.4 billion just on its home equity loans to more creditworthy borrowers. Those figures exclude loans Chase picked up in its purchase last September of the failed banking operations of Washington Mutual.

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A Wisconsin bank was hit by losses and took money from the TARP program. Now they are laying off. Marshall & Ilsley Corp., Wisconsin’s largest bank, is cutting 830 jobs and slashing its dividend after posting a fourth-quarter net loss on borrower defaults. The stock dropped 18 percent in early trading.

The health of smaller local and regional banks is a concern as larger banks may not be willing to buy smaller banks. Of course if banks fail, the FDIC assigns assets to another bank. We are not saying Marshall & Ilsley is in that situation by any means.

Here is a list of banks that failed in 2008, and there are some big names on the list:

Sanderson State Bank, Sanderson, TX December 12, 2008
Haven Trust Bank, Duluth, GA December 12, 2008
First Georgia Community Bank, Jackson, GA December 5, 2008
PFF Bank and Trust, Pomona, CA November 21, 2008
Downey Savings and Loan, Newport Beach, CA November 21, 2008
The Community Bank, Loganville, GA November 21, 2008
Security Pacific Bank, Los Angeles, CA November 7, 2008
Franklin Bank, SSB, Houston, TX November 7, 2008
Freedom Bank, Bradenton, FL October 31, 2008
Alpha Bank & Trust, Alpharetta, GA October 24, 2008
Meridian Bank, Eldred, IL October 10, 2008
Main Street Bank, Northville, MI October 10, 2008
Washington Mutual Bank, Henderson, NV and Washington Mutual Bank FSB, Park City, UT September 25, 2008
Ameribank, Northfork, WV September 19, 2008
Silver State Bank, Henderson, NV September 5, 2008
Integrity Bank, Alpharetta, GA August 29, 2008
The Columbian Bank and Trust, Topeka, KS August 22, 2008
First Priority Bank, Bradenton, FL August 1, 2008
First Heritage Bank, NA, Newport Beach, CA July 25, 2008
First National Bank of Nevada, Reno, NV July 25, 2008
IndyMac Bank, Pasadena, CA July 11, 2008
First Integrity Bank, NA, Staples, MN May 30, 2008
ANB Financial, NA, Bentonville, AR May 9, 2008
Hume Bank, Hume, MO March 7, 2008
Douglass National Bank, Kansas City, MO January 25, 2008

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GMAC said its closing Nuvell Credit Co., its Jacksonville-based subprime lending subsidiary, following its decision to stop funding loans for customers with bad credit. Nuvell stopped writing new business Jan. 7 in preparation for the closure, which will affect 348 employees in Florida, Arkansas and Texas. A GMAC,spokesman told trade magazine Automotive News that 136 employees will take jobs at GMAC and the other 212 will be laid off.

Operations will cease March 7. GM is also busy behind the scenes at GM Card. It looks like GM is running off the business. Lower credit limits and high interest rates will certainly offend many customers. HSBC runs the GM Card backend operations, and a search of Household – HSBC Watch shows the latest trends. One HSBC insider claims HSBC and GM don’t need good customers, while HSBC stands to make more money from less reputable credit cards.

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J.P. Morgan Chase & Co. announced plans to lay off about 21% of Washington Mutual Inc.’s employees by the end of 2009. J.P. Morgan, which acquired WaMu in September for $1.9 billion after it was seized by the government, told employees yesterday that it will lay off 4,000 workers by the end of January, according to J.P. Morgan spokesman Tom Kelly. Another 5,200 are being asked to stay on through various dates in 2009 to help with the deal’s integration.

In related news, JPMorgan Chase & Co. said Monday it intends to match in 2009 Washington Mutual’s 2008 level of corporate philanthropy in Washington state, which was $2.6 million. There is no word on severance packages for employees, however, but the total number of JP Morgan Chase employees to lose their jobs in the next years is said to be approximately 9200.

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Further proof that the subprime mortgage fiasco is still with us appeared today as GMAC dropped a bomb. GMAC Financial Services and its Residential Capital subsidiary plan to close all 200 GMAC mortgage retail offices nationwide, and cut the ResCap work force by 5,000 employees, or 60 percent. Workers say the field is already saturated, making it difficult to find another job with the same skill set. Many people expected the layoffs sooner.

ResCap, a large subprime-mortgage lender that lost $4.3 billion last year, will incur a charge expected to range from $90 to $120 million that reflects the 3,000 workforce.

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It seems as though Wachovia is cutting jobs to compensate for another huge loss. This former small North carolina bank knows what it’s like to grow over the years. Too bad they did not follow the Wells Fargo model of pricing by risk, as opposed to the HSBC Finance model of giving loans to anyone and everyone. The losers are the 11,000 people that are out of work. It looks like mortgage heydays are like eating an ice cream cone in the hot Carolina cotton fields – it will not last forever.

Wachovia Corp. reported a surprisingly large second-quarter loss Tuesday, deflating Wall Street’s hopes that the nation’s big banks are weathering the credit crisis well. The nation’s fourth-largest bank by assets said it lost $8.86 billion, is slashing its dividend and eliminating 10,750 positions after losses tied to mortgages soared. As other banks rejected cries of discrimination when they would not give risky loans to those who should not even buy a car on credit, Wachovia now finds itself in a jam. Wachovia might long for the good old days as a small bank back when textile mills still operated in North Carolina and tobacco was king.

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Check out this statement from Paul Miller, a Friedman, Billings, Ramsey & Co analyst regarding IndyMac: “Given continued home price declines, management’s higher loss estimates, recent ratings agency downgrades on the company’s mortgage-backed securities and the company’s decision to stop new mortgage originations, we do not believe that there is any value left for common shareholders,” Miller wrote. Once a major player in the Alt-A market, IndyMac is being hit from all sides and mortgage blues continue to pound the company.

Unfortunately Alt-A does not get the publicity that we see with subprime, but the Alt-A market is also pounded by foreclosures, the high cost of repairs and maintenance, and transportation costs. Supplies are going up and fuel surcharges are taking a toll on investors with Alt-A mortgages. IndyMac said it has $18 billion of deposits, of which more than 96 percent are insured by the Federal Deposit Insurance Corp.

Customers withdrew about $100 million of deposits late last month after Sen. Charles Schumer, a New York Democrat, raised questions to regulators about whether IndyMac could survive.

“IndyMac was one of the banks that was using relatively weak underwriting standards on the basis that housing prices would continue to rise in value,” said Jason Arnold, an analyst at RBC Capital Markets in San Francisco, in an interview. “With prices coming down, that became the bottom card in the house of cards built by these lenders.”

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One report by Reuters said the U.S. lost 49,000 jobs in May, the fifth straight monthly decline, and the unemployment rate rose to 5.5 percent, the biggest jump in than two decades. Somehow the data for May is open for debate. A different report said 25,000 jobs were added in May, although it is hard to have five straight months of declines if that were the case. Companies in the U.S. cut an estimated 79,000 jobs in June, a private survey based on payroll data showed.

I am in agreement with the initial figures for May, and I believe at least 25,000 jobs went away, plus 79,000 more in June. Keep in mind that some of the unemployed also lost their unemployment benefits and could not get a job. True unemployment in the United States is over 10 percent and possibly close to 12 percent. Another wave of subprime resets will hit this summer, and the security risks involved may mean job losses for those with specilized backgrounds, security clearances, or those who must qualify for a company credit card.

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