Countrywide plans to slash up to 12,000 jobs

NEW YORK (CNNMoney.com) -- Troubled subprime mortgage lender Countrywide Financial Corp. plans to slash as many as 12,000 jobs over the next three months, according to company statement released late Friday.

The cuts, which represent 20 percent of its workforce, follow a reduction of 500 jobs at its subprime lending unit in August and another 900 jobs mostly from its mortgage production divisions Wednesday.

The company says the new round of cuts may be smaller than expected if the market improves.

Countrywide (down $0.27 to $18.21, Charts, Fortune 500), which is the largest U.S. mortgage lender, says it's shifting its focus to relatively conservative loans. These would be held as long-term investments in its savings bank unit or sold to Fannie Mae (Charts) or Freddie Mac (Charts, Fortune 500), government sponsored entities. Countrywide is also seeking loan insurance from the Federal Housing Administration.

The mortgage lender also expects that its loan originations in 2008 will be about 25% lower than this year based on current interest rate levels.

"Countrywide's retail and wholesale lending divisions plan to continue aggressively pursuing the increased opportunities presenting themselves in the current environment for profitable market share growth," the company said in a statement Friday.

Among other companies hurting from subprime mortgage market turmoil, Bear Stearns (Charts, Fortune 500) slashed 850 jobs at its mortgage group early this week.