Coverage: Wells Fargo to cut thousands of jobs

Wells Fargo & Co. on Thursday said it would reduce jobs as part of its “ongoing transformation” to address industry trends and changes in customer behavior.

Josh Beckerman of The Wall Street Journal had the news:

The bank expects head count to decline by about 5% to 10% within the next three years, which includes displacements as well as normal attrition.

Wells Fargo had about 265,000 team members at the end of the second quarter.

Chief Executive Tim Sloan, in a regularly scheduled employee town hall meeting, discussed Wells Fargo’s progress in becoming more customer-focused and streamlined. “This work includes strengthening risk management, simplifying operations, leveraging digital automation, divesting noncore businesses, and continuing to become a more efficient company,” Sloan said.

Kate Rooney of CNBC.com reported that the cuts would come from layoffs and attrition:

Shares had little reaction to the news, and were last up by about 0.8 percent on Thursday.

The bank is still recovering from multiple scandals across its major business units in the past two years. In 2016, it was revealed that branch employees had opened millions of fake accounts in customers’ names without their knowledge to meet sales targets.

Wells Fargo switched up its executive ranks following the scandal but other investigations into its sales practices unearthed issues in its auto lending, mortgage and wealth management.

The ongoing scandals have added to pressure on current Wells Fargo CEO Tim Sloan. The bank denied recent rumors this week that former Goldman Sachs executive Gary Cohn was potentially replacing Sloan. Betsy Duke, chair of the lender’s board of directors, said in statement that the CEO “has the unanimous support of the board, and this support has never wavered.”

Deon Roberts of The Charlotte Observer reported that the bank’s largest employee base is in Charlotte:

The reduction would involve job cuts as well as attrition, Sloan said in a press release. Wells Fargo is based in San Francisco but maintains its largest employee base in Charlotte, where it has about 25,100 workers in the metro area.

Asked about what the reduction will mean for Charlotte, Wells spokesman Peter Gilchrist said the bank was not commenting on impacts by business line, location or job type.

The move also comes as Wells Fargo continues pushing to fix its reputation in the wake of a 2016 scandal involving the creation of unauthorized customer accounts, as well as more revelations of customer harm. Such disclosures have cost the bank business.

Wells Fargo had 264,500 employees companywide as of the end of June. Cutting 5 percent of that involves 13,225 jobs and 10 percent covers 26,450 positions. Thursday’s announcement appears to be one of the largest job cuts that Wells has ever disclosed.