Unlike Rivals, Wells Fargo Is Starting Job Cuts: Report

Wells Fargo CEO Charles Scharf. (Photo: Kyle Grillot/Bloomberg)

Wells Fargo is moving ahead with job cuts, about six weeks after news broke about plans that could affect tens of thousands of workers, according to a recent Bloomberg report.

“Starting in early August, we resumed regular job displacement activity,” Beth Richek, a spokesperson for the bank, said in a statement provided to the news service.

“We are at the beginning of a multi-year effort to build a stronger, more efficient company,” Richek said. “We expect to reduce the size of our workforce through a combination of attrition, the elimination of open roles and job displacements.”

The job cuts follow the San Francisco-based lender’s sale of hundreds of millions of dollars in assets earlier this year in order to meet the $1.95 trillion asset limit imposed on it by the Federal Reserve after its fake-accounts scandal, according to a Wall Street Journal report.

Like many other banks, Wells Fargo is having to sharply increase its loan-loss provisions. However, unlike most rivals, it is turning to job cuts as a means of improving its financial situation.

Details on Job Cuts

The initial cuts are set to affect employees whose positions were scrutinized before the pandemic, which put a stop to the planned layoffs, sources briefed on the situation told Bloomberg.

On a call with analysts in mid-July — after the bank reported its first quarterly loss since 2008 — CEO Charlie Scharf said: “We have a series of employees who’ve been told that their jobs will ultimately go away.”

The executive added, “we are going to let some time pass as we go through the initial stages of the COVID crisis.”