Solihull-based Paragon Group, which established a national reputation during Britain's buy-to-let boom, is axing more than 90 jobs.
The firm - which specialises in lending money to private landlords - suffered badly from last summer's credit crunch, and struggled to raise funds from the wholesale money markets.
Its share price plunged from an all-time high of 1081p in January 2007, to under 100p. Last month, Paragon's problems appeared to be receding when it raised almost £290 million via a rights issue.
However, the board has subsequently decided that 93 staff have to go from two of its operational divisions; Paragon Mortgages, and Mortgage Trust. Employees at Paragon Personal Finance, which provides secured loans, will not be affected.
Chief executive Nigel Terrington said the group's 650-strong workforce had to be streamlined to reflect the lower level of activity in the buy-to-let market.
"Our staff have been fantastic in growing this business over the years and dealing with the challenges created by the credit crunch," he said. "It is with great regret that we will have to let some of them go."
Paragon's shares lost 1p yesterday and closed at 98.75p.
