Fannie Plans Hundreds of Layoffs

Fannie Mae says it will reduce its work force by several hundred full-time employees as part of an effort to cut operating expenses by $200 million in 2007."While determinations are still being made as we undertake this restructuring, we anticipate that the company will have several hundred fewer full-time employees at the end of this year," Fannie spokesman Brian Faith said. The publicly traded company has 6,500 full-time employees, and its operating expenses have ballooned in the aftermath of an accounting scandal that has forced it to restate earnings. Now the government-sponsored enterprise is trying to catch up and file timely financial reports with the Securities and Exchange Commission. Fannie's administrative expenses totaled $3.1 billion in 2006, including $850 million in costs associated with the restatement process and related regulatory examinations, investigations, and litigation defense, according to a Feb. 27 SEC filing. The GSE also wants to cut back on contractors who are working on the restatement process. Fannie Mae can be found online at http://www.fanniemae.com.