Sept. 26 (Bloomberg) -- Credit Suisse Group will cut about 150 jobs, the latest global securities firm to reduce staff in response to the fallout from rising defaults in the U.S. subprime mortgage market.

Switzerland's second-largest bank will reduce the headcount almost entirely from its mortgage-backed securities unit, said Bruce Corwin, a New York-based spokesman. The firm has 44,871 employees worldwide, according to data compiled by Bloomberg.

``In line with the current environment and outlook, we've made targeted reductions, primarily in mortgage-backed securities businesses,'' he said by telephone today. Zurich-based Credit Suisse isn't closing any of its units, he said.

HSBC Holdings Plc, the U.K. bank that was among the first to disclose soured U.S. home loans seven months ago, said last week it will shut its Decision One subprime mortgage unit and eliminate 750 jobs. Lehman Brothers Holdings Inc., the biggest underwriter of U.S. mortgage bonds, fired more than 2,000 employees in the past six weeks after shutting a subprime unit and curtailing other parts of home-lending.

Corman declined to give overall staffing numbers for Credit Suisse's units with mortgage-related operations. The New York Times reported the job losses earlier, citing an unidentified person with knowledge of the matter.

Growing Defaults

Rising defaults in subprime mortgages, made to borrowers with bad or incomplete credit histories, wiped out demand for mortgage-backed securities, stopping the flow of money to lenders. The growing defaults increased the cost of borrowing for all but the most creditworthy companies.

Rates on asset-backed commercial paper rose to six-year highs in the U.S. The three-month London interbank offered rate, or Libor, hit a six-year high of 5.73 percent on Aug. 7.

Credit Suisse, down 9.6 percent this year, fell 1.4 percent to 76.65 Swiss francs in Zurich on Tuesday.

Home prices in 20 U.S. metropolitan areas fell the most on record in July, a private survey showed yesterday.

Values dropped 3.9 percent in the 12 months through July, steeper than the 3.4 percent decrease in June, according to the S&P/Case-Shiller home-price index. The index declined in January for the first time since the group started the measure in 2001, and has receded every month since then.

Stricter lending standards and reduced demand have prolonged the housing slump, now entering its third year. Prices may continue to fall as homes stay on the market longer, economists said. Defaults by subprime mortgage borrowers and rising foreclosures will put more houses back on the market, adding to the glut and depressing prices further.

The housing slump ``doesn't seem like it will go away any time soon,'' said Michael Gregory, a senior economist at BMO Capital Markets in Toronto.

To contact the reporter on this story: Ben Richardson in Hong Kong at brichardson8@bloomberg.net

Last Updated: September 25, 2007 23:26 EDT