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Ocwen (OCN) Decides to Slash 300 Jobs to Cut Expenses

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With an aim to check mounting expenses, Ocwen Financial Corp . OCN is set to slash jobs. The company announced its decision to trim nearly 10% of its U.S. workforce or 300 employees at its Waterloo, IO-based residential servicing facility.

This is part of Ocwen's ongoing cost-improvement strategy, with which it intends to lower expenses by $150 million over the next year to compensate the decline in revenues.

Notably, Ocwen stated that all the impacted workers will get an opportunity to apply at other Ocwen facilities, including the opening for 130 positions at its office in Coppell, TX. Moreover, the company intends to lease nearly half of its 155,000 square-foot facility in Waterloo.

For this, Ocwen is working with the City of Waterloo and the Greater Cedar Valley Alliance & Chamber's office of Economic Development to find a suitable tenant. Nonetheless, the company will continue to hold a presence in Waterloo.

Earlier in May 2015, Ocwen had announced its plan to terminate the residential servicing operations at Houston facility, leading to lay-off of 140 employees. The company's decision reflected its aim to streamline a number of call center sites, remove redundancies and enhance efficiency in residential loan servicing business.

Since the beginning of this year, Ocwen has been trying to streamline its mortgage servicing business owing to heightened regulatory scrutiny and questions regarding its capability to service mortgage-servicing rights ("MSRs"). As a result, the company projects a considerable decline in revenues. Therefore, in order to compensate for the fall in top line, Ocwen resorted to the afore-mentioned cost-cutting plan.

Moreover, last week, Ocwen had provided an updated outlook for 2015, which indicated further deterioration in its financial health. The company anticipates reporting a loss in 2015 owing to a challenging second half (read more: Do You Own Ocwen Stock? It's Time to Rethink ).

We believe Ocwen has taken a step in right direction by deciding to curtail workforce. This was further validated by investors, as the company's share price increased more than 2% following this announcement. Notably, the company's stock price has fallen more than 50% year to date, led by several fundamental concerns.

Currently, Ocwen holds a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the finance space include LendingTree, Inc. TREE , Walker & Dunlop, Inc. WD and Euronet Worldwide, Inc. EEFT . All these stocks sport a Zacks Rank #1 (Strong Buy).

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OCWEN FINL CORP (OCN): Free Stock Analysis Report

LENDINGTREE INC (TREE): Free Stock Analysis Report

WALKER & DUNLOP (WD): Free Stock Analysis Report

EURONET WORLDWD (EEFT): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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