Nov. 28 (Bloomberg) -- Bear Stearns Cos., the biggest underwriter of U.S. mortgage bonds, will eliminate 650 jobs in the firm's fourth round of cuts this year amid mounting losses on subprime home loans.

``We're going to rationalize our business, monitor staffing needs and align our infrastructure with current market conditions,'' said Russell Sherman, a spokesman for the New York- based firm. ``We continue to hire strategically.''

Bear Stearns, led by Chief Executive Officer James Cayne, had previously announced about 900 job cuts since August. After today's reductions, the firm will have winnowed out 10 percent of its employees. Eroding demand for securities backed by home loans to borrowers with heavy debts ate into earnings in the third quarter, when the firm posted the biggest decline in more than a decade. The company said this month that asset writedowns will lead to a fourth-quarter loss.

``Hopefully it's the last at Bear, but if they still have negative things to report in the first quarter, it could continue,'' said Jason Kennedy, chief executive officer of London-based recruitment firm Kennedy Associates.

Bear Stearns rose $4.07, or 4.3 percent, to $99.50 at 4:17 p.m. in New York Stock Exchange composite trading. The shares have lost about 39 percent this year.

Wall Street firms have cut about 10,000 jobs this year, mostly in units that make home loans and package them into securities. Lehman Brothers Holdings Inc., the No. 2 U.S. mortgage bond underwriter, dismissed 2,450 people in its home loan business. UBS AG, Europe's biggest bank by assets, said last month that it would cut 1,500 jobs because of losses in the U.S. subprime market.

Fixed-Income Decline

Almost all of the 650 positions Bear Stearns is eliminating are in the U.S., and the majority are in its fixed income unit. The firm will shed at least 20 in London and make further reductions at its Rooftop Mortgage Ltd. business in the U.K., a person familiar with the cuts said earlier today.

Bear Stearns had 15,516 employees at the end of August, including more than 1,500 in London. The company said in September that third-quarter profit fell 61 percent to $171 million as rising defaults on home loans sparked a fixed-income market decline in August.

The world's biggest banks have written down more than $50 billion on credit-related losses, and chief executives at UBS, Citigroup Inc. and Merrill Lynch & Co. have been forced to resign.

To contact the reporter on this story: Yalman Onaran in New York at yonaran@bloomberg.net.

Last Updated: November 28, 2007 16:33 EST