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JPMorgan Chase , the nation’s largest bank, has started a workforce reduction of its mortgage lending business this week after having been struck by a tightening monetary policy that drove mortgage rates to over 6%.

“Our staffing decision this week was a result of cyclical changes in the mortgage market,” a spokeswoman for JPMorgan wrote in a statement on Wednesday. 

“We were able to proactively move many impacted employees to new roles within the firm and are working to help the remaining affected employees find new employment within Chase and externally.”

The spokeswoman did not confirm how many employees were laid off or moved to different divisions and their job positions. Bloomberg reported first on the topic. Citing sources, it mentioned the total affected will be about 1,000 workers, with about half target of a layoff and the other half moving to different divisions within the bank. 

The Jamie Dimon-led bank layoffs come two months after competitor  Wells Fargo Co.,  the top depositary mortgage lender in the country, cut jobs in its home lending business, among them hundreds of mortgage processors. 

Nonbank lenders such as PennymacMr. CooperloanDepotGuaranteed RateFairway Independent MortgageInterfirst Mortgage Co., Movement Mortgage, and Better.com all conducted at least one round of workforce reductions this year as mortgage rates surged past the 5% mark.

With mortgage rates jumping to the 6% level after the Federal Reserve raised the federal funds rate by 75 basis points last week, a rate hike not seen since 1994, more layoffs are expected by industry observers.

At JPMorgan, the fifth-biggest mortgage lender in the country, the mortgage business shrank in the first quarter.

Origination volume totaled $24.7 billion from January to March, a decline of 41% compared to the prior quarter and down 37% in comparison with the first quarter of 2021. Home lending net revenue reached $1.2 billion in the first quarter, down 20% compared to the same quarter in 2021. However, compared to the fourth quarter of 2021, it increased 8%.  

Dimon, chairman and chief executive officer at JP Morgan, told analysts after the first-quarter earnings came out that he expected some difficult days ahead due to factors such as inflation and the war in Ukraine. “Those are storm clouds on the horizon that may disappear; they may not. That’s a fact,” he said.  

On the bright side, he said customers still have $2 trillion in their savings and checking accounts, businesses are in good shape, home prices are up, and credit is extraordinarily good, which will continue in the second and third quarters.