Mortgage insurer Genworth to cut 400 jobs

Thursday, June 6th, 2013 | Finance News

(Reuters) - Life and mortgage insurer Genworth Financial Inc said it will cut 400 jobs to reduce costs by up to $90 million a year.

The company, which has about 5,800 employees, did not disclose where the cuts would be made but said it would take a charge of $15 million to $20 million in the current quarter.

Genworth's total expenses fell 8.4 pct to $9.31 billion in 2012.

The job cuts include 150 positions that will not be filled.

"We do not believe these actions significantly change our previously disclosed views on performance in 2013, but anticipate them to have a more meaningful impact in future years," Chief Executive Tom McInerney said in a statement.

Genworth, which was once part of industrial conglomerate General Electric , sold its wealth management and alternative investment businesses in March for about $413 million to repay debt.

Genworth has about $4.76 billion in long-term debt and $3.80 billion in cash, according to a regulatory filing.

The company had said in January it was reorganizing to separate its mortgage insurance business from the rest of the company, reducing the risk of default on its bonds.

Mortgage insurers such as Genworth, Radian Group Inc , MGIC Investment Corp and Old Republic International Corp sold billions of dollars of policies at low prices during the housing boom and were stuck with huge losses when the market crashed.

But profits on new insurance policies are increasingly offsetting legacy losses.

Genworth's first-quarter profit more than doubled, beating analysts' estimates, as a recovering U.S. housing market boosted its mortgage insurance business.

The company's shares closed at $10.35 on the New York Stock Exchange on Wednesday. They were little changed in light trading before the bell on Thursday.

(Reporting by Tanya Agrawal in Bangalore; Editing by Joyjeet Das)

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