Wells Fargo shifts jobs over­seas af­ter lay­offs

The Charlotte Observer (Sunday) - - Front Page - BY DEON ROBERTS der­[email protected]­lot­teob­server.com

Wells Fargo has laid off hun­dreds of U.S. em­ploy­ees dur­ing the past year as it pushed many of their jobs over­seas, ac­cord­ing to an Ob­server anal­y­sis of fed­eral doc­u­ments.

In the Char­lotte metro area, the bank’s largest em­ploy­ment hub, mort­gage jobs elim­i­nated this year have also been sent over­seas, Wells con­firmed. The bank slashed hun­dreds of such work­ers in the area but would not dis­close how many of those jobs it has sent out­side the U.S.

The doc­u­ments, pub­lished on­line by the U.S. Depart­ment of La­bor, shed light on how Wells Fargo has shifted work out of the coun­try. Many of the U.S. lay­offs have af­fected call cen­ter op­er­a­tions, in­clud­ing about 460 em­ploy­ees cut last year when Wells Fargo an­nounced the clo­sure of a site in Penn­syl­va­nia.

Wells Fargo has not al­ways dis­closed that it was re­lo­cat­ing U.S. jobs in an­nounc­ing the lay­offs. But the doc­u­ments — find­ings of La­bor Depart­ment in­ves­ti­ga­tions into the cuts — show the bank has sent the work out­side of the coun­try.

In the past year, the de­part- ment in­ves­ti­gated 636 lay­offs re­ported by em­ploy­ees and state of­fi­cials seek­ing de­ter­mi­na­tions that the work­ers’ jobs were be­ing shipped out of the U.S., doc­u­ments show. The find­ings are re­quired be­fore work­ers can re­ceive fed­er­ally funded ben­e­fits, like weekly in­come pay­ments and train­ing so they can find new jobs.

What’s not clear is how many of the 636 jobs Wells sent over- seas, although the doc­u­ments state that a “sig­nif­i­cant” num­ber were. The La­bor Depart­ment’s find­ings also do not name coun­tries where jobs were sent, but Wells Fargo re­ported ex­pand­ing its Philip­pines op­er­a­tions in re­cent years.

When it an­nounced the Penn­syl­va­nia call cen­ter clo­sure in Oc­to­ber 2017, the bank said that the work done at the fa­cil­ity was not be­ing re­lo­cated.

“This de­ci­sion is be­ing made pri­mar­ily be­cause we have ex­pe­ri­enced a drop in call cen­ter vol­ume,” Wells spokes­woman Christina Carmichael said at the time. “These jobs are not be­ing moved any­where.”

But in its find­ings, the La­bor Depart­ment said the bank shift-

ed the work to an un­named for­eign coun­try, “which con­trib­uted im­por­tantly to worker group sep­a­ra­tions” at the call cen­ter. Wells Fargo de­clined to com­ment on the La­bor Depart­ment’s find­ings, and did not ad­dress an Ob­server ques­tion re­gard­ing the dis­crep­ancy in what hap­pened to the jobs.

“Wells Fargo has been caught ly­ing again,” Erin Ma­honey, spokes­woman for New York-based Com­mit­tee for Bet­ter Banks, said in a state­ment. The coali­tion of in­dus­try em­ploy­ees pushes for bet­ter work­ing con­di­tions at banks.

“This time, the bank tried to cover up why it’s lay­ing off front­line em­ploy­ees who live pay­check to pay­check in­stead of com­ing clean about ship­ping their jobs over­seas,” Ma­honey said.

In re­sponse, Wells stated, “This is a struc­ture that is com­mon in the in­dus­try and we have long been trans­par­ent about it. We strongly dis­agree and take is­sue with any claims that say oth­er­wise. We value our in­ter­na­tional team mem­bers as an in­te­gral part of our work­force, yet the vast ma­jor­ity of Wells Fargo team mem­bers will con­tinue to be based in the U.S.”


The over­seas moves come as the San Fran­cisco-based bank seeks to trim bil­lions in costs and re­cover from a string of scan­dals in re­cent years.

Wells Fargo has pre­vi­ously ac­knowl­edged that mov­ing jobs over­seas could be part of its ef­forts to cen­tral­ize op­er­a­tions fol­low­ing a 2016 scan­dal in­volv­ing fake ac­counts opened by bankers seek­ing to meet high-pres­sure sales goals, the Ob­server re­ported last year.

“It’s shame­ful that an Amer­i­can com­pany like Wells Fargo is slash­ing jobs at home and out­sourc­ing them abroad, all while plan­ning to spend more than $24 bil­lion on stock buy­backs that ben­e­fit only the bank’s ex­ec­u­tives and share­hold­ers,” Sen. El­iz­a­beth War­ren, a Mas­sachusetts Demo­crat, said in a state­ment to the Ob­server. War­ren is a long-time Wells critic and mem­ber of the Se­nate Bank­ing Com­mit­tee.

Wells stated in June that it planned to re­pur­chase bil­lions in its stock through the sec­ond half of next year.

In a state­ment to the Ob­server, the bank did not rule out send­ing more work out­side the U.S. It also is aim­ing to cut its to­tal em­ploy­ment by 5 to 10 per­cent over the next three years un­der a plan an­nounced in Septem­ber.

The bank con­tin­ues look­ing for ways to stream­line op­er­a­tions, it said in the state­ment to the pa­per. Those ef­forts in­clude mov­ing work to other U.S. lo­ca­tions and, in some cases, out of the coun­try to re­flect its need to op­er­ate in a 24-hour busi­ness cy­cle, it said.


Banks, tech­nol­ogy firms and re­tail­ers like Mooresville-based Lowe’s have sent U.S. jobs to other coun­tries, such as In­dia and Mex­ico, where la­bor costs tend to be cheaper.

In Jan­uary, for ex­am­ple, the Depart­ment of La­bor con­firmed that New York­based JPMor­gan Chase was mov­ing work over­seas af­ter Texas em­ploy­ees had re­ported that the bank was lay­ing off 500 peo­ple in that state.

And in March, the depart­ment de­ter­mined that Char­lotte-based Bank of Amer­ica was push­ing work out­side the U.S. fol­low­ing 10 Cal­i­for­nia lay­offs re­ported in 2017.

In Char­lotte, Bank of Amer­ica and Wells Fargo are by far the two big­gest banks, em­ploy­ing roughly 40,000 peo­ple com­bined.

Bank of Amer­ica, in re­cent years, has not sent as many jobs over­seas as Wells Fargo, the La­bor Depart­ment doc­u­ments show. Over the past two years, the depart­ment in­ves­ti­gated re­ports by work­ers and state of­fi­cials in­volv­ing at least 70 to­tal lay­offs of Bank of Amer­ica work­ers and de­ter­mined the work had been moved out­side the U.S.

Just in mid-De­cem­ber, the La­bor Depart­ment said it de­ter­mined that Wells Fargo had pushed work over­seas af­ter the agency in­ves­ti­gated a Septem­ber re­port of 115 con­sumer lend­ing cus­tomer man­age­ment lay­offs in Min­ne­sota.

For Wells, the doc­u­ments pro­vide pre­vi­ously un­known de­tails on its ef­forts to re­lo­cate U.S. jobs.

The La­bor Depart­ment, for in­stance, said it con­tin­ues to in­ves­ti­gate a July re­port of 28 New York lay­offs af­fect­ing Wells em­ploy­ees in res­i­den­tial ren­o­va­tion mort­gage ser­vices.

Even as it ush­ers jobs out of the United States, Wells Fargo says 90 per­cent of its 262,000 em­ploy­ees are in this coun­try and will con­tinue to be here.

“Wells Fargo’s global work­force rep­re­sents a small per­cent­age of our to­tal work­force and also is small rel­a­tive to many of our peers,” Wells said.

Ac­cord­ing to dis­clo­sures on the banks’ web­sites, about 84 per­cent of Bank of Amer­ica’s em­ploy­ees are in the U.S. That fig­ure is roughly 67 per­cent at JPMor­gan. For those banks and Wells Fargo, their over­seas op­er­a­tions, such as in­vest­ment bank­ing, are not nec­es­sar­ily func­tions that were pre­vi­ously based in the U.S.

The Char­lotte re­gion will also re­main home to Wells Fargo’s largest em­ploy­ment hub, which has more than 25,500 work­ers, the bank said.


Crit­ics note that when jobs are sent over­seas, it’s Amer­i­can tax­pay­ers who are left pick­ing up the tab.

That’s be­cause if the Depart­ment of La­bor de­ter­mines jobs have been moved over­seas, af­fected work­ers can re­ceive ben­e­fits from the fed­eral Trade Ad­just­ment As­sis­tance pro­gram. That aid in­cludes weekly in­come pay­ments, train­ing to ac­quire new skills and re­lo­ca­tion al­lowances.

Mov­ing jobs out­side the U.S. also causes the fed­eral and state govern­ments to lose in­come tax and other tax rev­enue from the un­em­ployed work­ers, and some of those work­ers may wind up on food stamps, said at­tor­ney John Miano. He works for the Im­mi­gra­tion Re­form Law In­sti­tute in Wash­ing­ton, D.C., the le­gal arm of the con­ser­va­tive Fed­er­a­tion for Amer­i­can Im­mi­gra­tion Re­form.

In ad­di­tion, when com­pa­nies shut down a large op­er­a­tion, it can be hard for those work­ers to find jobs as they all com­pete with one an­other in the same geo­graphic area, he said. “The ef­fect is not only on the peo­ple who lose their jobs,” Miano said. “It has a ma­jor im­pact on ev­ery­one else.”


Wells Fargo did not dis­close where it is send­ing the U.S. jobs, say­ing it is dif­fi­cult to cor­re­late U.S. job cuts “with the work be­ing done in our in­ter­na­tional lo­ca­tions.” But the bank has had op­er­a­tions in the Philip­pines since at least 2011 and has been bulk­ing up its op­er­a­tions there re­cently.

Last year, the bank said its op­er­a­tion in the Philip­pines had grown from less than 100 to more than 4,000 work­ers over six years. The bank also said it was build­ing an­other Filipino lo­ca­tion that could hold more than 7,000.

Wells Fargo CEO Tim Sloan last year came un­der fire from law­mak­ers over send­ing jobs over­seas dur­ing a Se­nate hear­ing on the fake-ac­counts scan­dal. Ques­tioned at the hear­ing about the bank’s Filipino op­er­a­tions, Sloan said po­si­tion­ing em­ploy­ees world­wide helps the fourth-largest U.S. bank by as­sets serve cus­tomers around the clock.

In 2012, the Ob­server, cit­ing an in­ter­nal memo, re­ported that Wells Fargo was pre­par­ing to out­source jobs in its in­sti­tu­tional re­tire­ment di­vi­sion to In­dia and the Philip­pines. Some of those jobs were ex­pected to come from Char­lotte, the pa­per re­ported at the time.

In the U.S., low-skilled, la­bor-in­ten­sive jobs are the most pop­u­lar ones for com­pa­nies to send off­shore, said Martina Mus­teen, busi­ness pro­fes­sor at San Diego State Univer­sity.

Many of those po­si­tions are hard to fill in the U.S., where a call-cen­ter job is not nec­es­sar­ily viewed as pres­ti­gious, she said. But in coun­tries with emerg­ing economies like the Philip­pines, call cen­ter work is a well-re­spected ca­reer, she said.


Mean­while, U.S. law­mak­ers are watch­ing the in­dus­try closely.

This year, law­mak­ers have heav­ily crit­i­cized Wells Fargo and other big banks for ship­ping jobs over­seas, cit­ing the huge sav­ings they are reap­ing from cor­po­rate tax cuts signed into law by Pres­i­dent Don­ald Trump in 2017.

In re­cent months, Wells Fargo has drawn more scru­tiny for send­ing jobs out of the U.S. than some of its peers, in large part be­cause of how much it is ben­e­fit­ing from the tax cuts.

Among ma­jor U.S. banks, Wells Fargo’s es­ti­mated an­nual tax cut of $3.7 bil­lion is the big­gest, ac­cord­ing to Amer­i­cans for Tax Fair­ness, a left-lean­ing Wash­ing­ton, D.C.-based group.

“It’s es­pe­cially galling to us that tax­pay­ers are hav­ing to help these work­ers out at the same time that ... Wells Fargo was the big­gest ben­e­fi­ciary of last year’s tax cut,” said Shane Lar­son, spokesman for the large Com­mu­ni­ca­tions Work­ers of Amer­ica union.

“We have mil­lions of Amer­i­cans that are will­ing to have these jobs,” he said.

Porter McCon­nell, with the Wash­ing­ton, D.C., group Amer­i­cans for Fi­nan­cial Re­form, said Wells Fargo’s trans­fer­ring of jobs over­seas is not sur­pris­ing.

“One way the tax cut lined the pock­ets of ex­ec­u­tive and share­hold­ers was by re­duc­ing tax rates on in­come from over­seas, which cre­ates a pow­er­ful in­cen­tive to shift jobs and cash out of the United States,” she said.

Mean­while, law­mak­ers have con­tin­ued to step up their pres­sure on the bank for send­ing jobs over­seas.

In a Jan­uary let­ter to CEO Sloan, Sen. Bob Casey, D-Pa., ex­pressed con­cern about the hun­dreds of call-cen­ter lay­offs in his state while Wells has been grow­ing its oper- ations in the Philip­pines.

In an Au­gust let­ter to Sloan, Sen. Cather­ine Cortez Masto, D-Nev., said she had se­ri­ous con­cerns about the bank’s June an­nounce­ment to close a call cen­ter in Ne­vada and lay off about 340 em­ploy­ees.

“It is alarm­ing that these lay­offs are oc­cur­ring de­spite the as­tro­nom­i­cal ben­e­fits that Wells Fargo will re­ceive from the” tax cuts, she wrote.

For its part, Wells Fargo said it has made im­por­tant in­vest­ments in its U.S. op­er­a­tions since the tax cut. For ex­am­ple, it raised the min­i­mum wage this year for its low­est-paid em­ploy­ees to $15 per hour, af­ter a $1.50 per hour raise an­nounced af­ter Trump signed the tax law.

And Wells Fargo said it will con­tinue to be one of the largest cor­po­rate in­come tax­pay­ers in U.S. be­cause the over­whelm­ing ma­jor­ity of its busi­nesses, em­ploy­ees and op­er­a­tions are in this coun­try.

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