GMAC Financial Services said Wednesday it will close all of its 200 retail offices and lay off about 5,000 employees as part of a plan to reduce its mortgage lending and servicing because of the housing market downturn.
The majority of the layoffs are planned for GMAC’s mortgage lending division, Residential Capital LLC, known as ResCap, and will reduce the work force at the unit by 60 percent, the company said.
In the first half of the year, ResCap’s U.S. mortgage loan production was valued at about $35.7 billion, down nearly 39 percent from the same period in 2007. Yet it was still the seventh-largest mortgage originator, with 3.9 percent market share, according to trade publication Inside Mortgage Finance.
Auto makers see rise in sales
Nearly every major automaker saw its U.S. sales drop in August, but many are seeing signs that the worst slump in recent history may have bottomed out.
Overall, U.S. sales fell 15.5 percent compared with August of last year but rose 10 percent from July’s dismal figures, according to Autodata Corp. Chrysler LLC said its U.S. sales fell more than 34 percent last month, while Ford Motor Co. reported a 26.5 percent decline. Toyota Motor Corp.’s sales dipped 9.4 percent, and Honda Motor Co. saw a 7.3 percent slide.
Nissan Motor Co. was the only major automaker to report an increase over August 2007: Its sales climbed 13.6 percent.
But the increase over July buoyed most automakers, with sales executives saying that lower fuel prices were starting to ease consumers’ minds.
Microsoft cutting Xbox price
Microsoft Corp. is cutting the price of its Xbox 360 gaming console beginning Friday, with the cheapest version selling for $200, making it less expensive than the Nintendo Wii, which retails for $250.
The Xbox 360 Arcade version had been selling for $280.
Microsoft, in announcing the reduced cost, said “history shows that more than 75 percent of all console sales happen after the price falls below the $200 mark.”
Sony Corp.’s 80-gigabyte PlayStation 3 console, which includes a Blu-ray player, sells for $400. Sony had cut the price of that console in July. The company has said there are no plans this year to cut the price further.