‘More aggressive’ job cuts are coming to Wells Fargo, the bank’s CEO says
Wells Fargo is planning to be “more aggressive” about layoffs at the bank, and expects to have higher severance costs in the fourth quarter than initially expected, its CEO said.
In September, Wells Fargo said additional layoffs and a decrease in office space were expected for the company. In recent years, tens of thousands of jobs were cut. More may come in 2024.
CEO Charlie Scharf said the job cuts, and finding ways to be more productive, is like “peeling an onion back.” He made the comments during an investor conference on Tuesday hosted by Goldman Sachs U.S. Financial Services.
“When you become more efficient it gives you a chance to look at everything else and say, ‘Okay, what’s next?’ ” Scharf said about the company not being close to where it needs to be in terms of reducing expenses.
Wells Fargo’s headcount went down significantly, Scharf said. The company had more than 268,000 employees in 2020, according to a filing with the U.S. Securities and Exchange Commission. Scharf the bank is now down to 230,000 or fewer employees. That’s a 14% decrease in jobs.
Scharf did not cite a specific number of layoffs that the company was planning to do going forward. But he said that Wells Fargo wants to eliminate duplication, simplify the company, and continue to invest in areas such as AI.
“And so, the real question comes out as to how you balance those things?” Scharf asked. “Because we do have levers that we can pull, we can decide to invest more or less, and we get more or less aggressive on the expense side.”
With the layoffs, Scharf said Wells Fargo is looking at spending between $750 million and $1 billion for severance pay in the fourth quarter, which was higher than anticipated.
“With turnover dropping, unfortunately, we’re going to have to be more aggressive about our own internal actions,” he said. “But again, we think that that’s the right thing to do for the long-term.”
Wells Fargo serves 69 million customers in 28 countries and operates in more than 5,500 locations. The San Francisco-based company employs about 27,000 jobs in Charlotte, its largest employment hub.
Cuts continue for major bank
Wells Fargo is one of several financial institutions making job cuts and dealing with economic challenges in the Charlotte region.
Truist, based in Charlotte, is also planning $750 million in “sizable” layoffs and other cuts to reduce expenses. Truist had more than 3,000 workers in the area, part of more than 50,000 employees companywide, as of last year.
Ally Financial, a banking company with a large workforce in Charlotte, announced plans to cut 5% of its workforce in October. Ally has 11,700 employees, including 2,700 in Charlotte.