Flagstar Bank laying off 700 more employees, 1,200 others to be affected by sale of mortgage business

Flagstar Bank is laying off about 700 more workers “as part of its strategic transformation plan,” according to the bank’s Hicksville-based parent company.

The layoffs represent about 8% of the bank’s workforce, New York Community Bancorp Inc. — which bought Flagstar in 2022 — said in a statement Thursday.

Those job cuts are in addition to a reduction of about 1,200 employees associated with the impending sale of Flagstar’s mortgage servicing and third-party origination business to Nationstar Mortgage LLC, which does business as Mr. Cooper, NYCB said.

Most of those 1,200 employees will have the opportunity to transfer to the buyer, NYCB said.

The sale is expected to take place in the fourth quarter of this year.

NYCB could not be immediately reached for comment Friday morning. It was not clear how many of the affected employees work on Long Island. 

NYCB this year began undertaking a strategy to strengthen its management, improve efficiency and enhance credit oversight, president and CEO Joseph Otting said in the statement Thursday.

“While these strategic actions involve difficult decisions, including impacts on jobs, we believe they are essential for strengthening our financial foundation and building a more agile, competitive company. This will enable us to focus on strategic investments in other areas and better serve our clients and shareholders, ensuring long-term sustainability and profitability,” he said.

Flagstar Bank N.A. operates 419 branches in 12 states, with a significant presence in the Northeast and Midwest. The bank has more than 40 branches on Long Island.

Flagstar Mortgage operates across the United States via a wholesale network of about 3,000 third-party mortgage originators, NYCB said.

Check back for updates on this developing story.

By Tory N. Parrish

tory.parrish@newsday.comToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.