Shares of First American Corp. dipped Wednesday after the seller of home title insurance said it would eliminate 1,300 full-time jobs and cut some executive perks to trim costs during the ongoing housing slump.
Shares fell $1.15, or 2.7 percent, to $40.25.
“In light of rapidly changing economic conditions, the company continues to evaluate its personnel needs,” the company said in a statement Tuesday disclosing the job cuts.
First American is one of the nation’s largest sellers of home title insurance. It’s also a business information provider.
The job cuts planned for the third quarter amount to 3 percent of the 40,000 employees at the Santa Ana-based company, which cut 600 jobs in the second quarter.
The combined job cuts are expected to save the company $108 million annually. In all, 1,400 jobs will be eliminated in the title insurance and services segment.
The executive perks and benefits being eliminated are expected to result in annual savings of about $16 million including $12 million in the title insurance and services segment.
Title insurers have seen the number of claims rise as the housing downturn has resulted in higher mortgage defaults and foreclosures.
At an insurance conference late Tuesday, Frank V. McMahon, First American’s chief financial officer, said the company was facing a more challenging business environment and may take further action to cut costs if needed.
The company’s title orders were down 13.5 percent in August compared to the year-ago month, and down 7.2 percent from July, he said.
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