Countrywide Financial (NYSE: CFC), the troubled mortgage company, is laying off a number of people in its loan origination business. According to (subscription required) The Wall Street Journal, the division where the cuts will occur, the Full Spectrum division, has 6,800 employees. It is not clear how many of them will go.

The Journal writes that "the company now is expected to reduce sharply its lending and costs because investor anxiety over rising defaults has made it almost impossible for lenders to sell many types of loans." The market is trying to read the tea leaves as conflicting news come out of the lending company. A week ago, a Merrill Lynch analyst raised the question of whether the firm would make it.

The debate about Countrywide's future has shown in the stock price. Last week, the stock opened at $28.80. By Thursday, concerns about whether CFC could finance its activities dropped the shares to $15.31. Then, news that the Fed had eased rates moved the shares as high as $23.90 on Friday.

The news of the lay-offs is not likely to help investor perceptions of the company today.

Douglas A. McIntyre is a partner at 24/7 Wall St.