July 8 (Bloomberg) -- IndyMac Bancorp Inc., the California- based lender that is firing half its employees, plunged 37 percent in early trading after being told by regulators the bank isn't ``well capitalized.''

IndyMac dropped 26 cents to 45 cents at 8:05 a.m. New York time in early trading. The lender will slash its workforce by 53 percent to 3,400 employees and curb lending, IndyMac said yesterday on its Web site. The Pasadena-based company said it was working with regulators on a new business plan.

``We don't expect, given the really rough state of the housing market, that IndyMac is going to be able to get out of this,'' said Jason Arnold, an analyst at RBC Capital Markets in San Francisco, in an interview yesterday. ``The big problem is that no one will give them money. There's too much risk involved and not enough value in their franchise.''

The lender's so-called operating liquidity stands at about $1.7 billion, IndyMac said in a regulatory filing today. The company's second-quarter loss will exceed the $184 million reported in the prior period, IndyMac said. The firm has lost more than 95 percent of its market value in the past 12 months.

IndyMac, the second-largest independent U.S. mortgage lender last year behind Countrywide Financial Corp., lost almost $900 million in the nine months ended in March.

To contact the reporter on this story: Linda Shen in New York at lshen21@bloomberg.net

Last Updated: July 8, 2008 08:13 EDT