Wells Fargo to re­duce work­force by up to 10%

The Malta Business Weekly - - NEWS -

The trou­bled US bank Wells Fargo is plan­ning a steep re­duc­tion of staff that could af­fect more than 26,000 peo­ple.

The firm said it ex­pects head­count to de­cline by 5% to 10% over the next three years, through a com­bi­na­tion of cuts and reg­u­lar at­tri­tion.

The move is part of an ef­fort to make the bank more ef­fi­cient, as the sec­tor moves on­line, boss Tim Sloan said.

The firm is also try­ing to re­cover from a series of dam­ag­ing scan­dals.

The Cal­i­for­nia-based bank at­tracted pub­lic out­rage in 2016 af­ter it emerged that sales as­so­ci­ates had opened mil­lions of ac­counts with­out cus­tomer per­mis­sion.

This spring, US reg­u­la­tors fined the com­pany $1bn to set­tle claims of mis­con­duct re­lated to mort­gage and auto loans.

And in Fe­bru­ary, the US Fed­eral Re­serve, cit­ing "wide­spread con­sumer abuses and other com­pli­ance break­downs", is­sued an un­prece­dented or­der that re­stricted the firm's growth pend­ing gov­er­nance im­prove­ments.

None of this has helped the firm's fi­nan­cial po­si­tion.

The bank, which has seen a 10% year-on-year de­cline in profit in the first six months of the year, has said it plans to cut over­all ex­penses by $3bn by 2020.

And in Au­gust, it an­nounced lay­offs of hun­dreds of work­ers in its home loan unit.

Mr Sloan said: "We are ad­dress­ing past is­sues, en­hanc­ing our fo­cus on cus­tomers, strength­en­ing risk man­age­ment and con­trols, sim­pli­fy­ing our or­gan­i­sa­tion, and im­prov­ing the team mem­ber ex­pe­ri­ence."

He said the firm would pro­vide af­fected em­ploy­ees with sup­port, and noted that the bank will re­main one of the largest em­ploy­ers in the US even af­ter the re­duc­tion.

Wells Fargo, which once en­joyed a ster­ling rep­u­ta­tion and ranked as the third largest bank in the US as of March, had about 264,500 em­ploy­ees at the end of June.

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