Wells Fargo to cut headcount by 5-10 percent in next 3 years

(Reuters) - Wells Fargo & Co   said on Thursday it would reduce its headcount by about 5 percent to 10 percent within the next three years as part of a turnaround plan.

Reuters September 21, 2018 04:05:13 IST
Wells Fargo to cut headcount by 5-10 percent in next 3 years

Wells Fargo to cut headcount by 510 percent in next 3 years

(Reuters) - Wells Fargo & Co  said on Thursday it would reduce its headcount by about 5 percent to 10 percent within the next three years as part of a turnaround plan.

As of  June 30th, the nation’s fourth largest bank had roughly 264,500 employees, making a 10 percent reduction representative of about 26,450 jobs. Wells Fargo said the latest reduction would reflect displacements as well as normal team-member attrition.

The cuts will help Wells reach its goal of reducing costs by $4 billion by 2020 as it tries to grow profits and recover from a series of scandals while operating under the Federal Reserve’s asset cap.

Wells Fargo has also said it will reduce its branch count by about 800 by 2020 and sell non-core businesses to lower costs and become more efficient. Last month the bank laid off 600 employees in its mortgage division which has faced headwinds amid a slowdown in refinancing demand.

The layoffs were not a surprise according to Keefe Bruyette & Woods analyst Brian Kleinhanzl and that sentiment was reflected in Wall Street’s muted reaction to the news. The stock rose 0.6 percent to $55.55 during Thursday trading.

“Employee related costs are the largest expense so that was likely where the cuts were coming,” he said. Automation also lowers the need for staffing over time.”

The bank did not specify which departments or regions would be impacted by the reductions, but it said the cuts will be made to reflect changing consumer preferences as more customers perform banking tasks using self-service technology.

“Wells Fargo takes very seriously any change that involves its team members, and as always, we will be thoughtful and transparent, and treat team members with respect,” said Chief Executive Tim Sloan in a statement.

Wells Fargo reported a lower-than-expected quarterly profit in July as lending activity slowed and the bank said much of the decline had to do with moves to avoid riskier loans.

Wells Fargo's shares rose 0.6 percent to $55.55 in late afternoon trading on Thursday.

(Reporting by Arunima Banerjee and Bharath Manjesh in Bengaluru; Editing by Maju Samuel)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.