Seattle-based Washington Mutual Inc. announced yesterday that it would lay off more than 3,000 workers and set aside up to $1.6 billion for loan losses in the fourth quarter, becoming another finance company to predict major losses, the Associated Press reported.

The company also cut its quarterly dividend to 15 cents from 56 cents per share and plans a $2.5 billion offering of preferred stock, convertible to common shares, which will dilute the value for existing stockholders. It will shut down its subprime mortgage operation entirely, closing about 190 of its 335 home loan centers and sales offices and nine call centers. It also will close down WaMu Capital Corp., relying instead on third party broker-dealers to sell mortgage-backed securities. It already cut 1,000 jobs related to its subprime operations earlier this fall.

These changes will save the company about $140 million in the fourth quarter, but it still expects to post a loss, partially from $1.6 billion in write-downs associated with its home loan business.

This announcement comes after Switzerland-based UBS AG said it would sell $11.5 billion in shares to Government of Singapore Investment Corp. and to an unidentified investor in the Middle East. It also will write down $10 billion from losses in its U.S. subprime lending market.