Its almost 2024 and it looks like there no stopping to the layoffs happening across the industry. The U.S. Wells Fargo (WFC.N) may reduce its workforce further in order to enhance efficiency, according to Chief Financial Officer Mike Santomassimo on Tuesday. Wells Fargo Layoffs may soon happen in the coming months.
Since the third quarter of 2020, the bank has begun reducing its head count. It has already slashed nearly 40,000 jobs, and Santomassimo believes the reduction will continue in order to increase efficiency.
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Most recent round of Wells Fargo Layoffs
Wells Fargo had gone through layoff in the beginning of 2023. They were going through multiple rounds of count reduction.
They employed 233,834 employees at the end of the June quarter, down from 243,674 in the previous year’s second quarter.
The bank has reduced its mortgage activity, which has resulted in layoffs. All this is done in order to cut losses they incurred over time.
The commercial real estate market is also under strain, notably in office loans, which have emerged as a major concern for banks as financing costs climb for many buildings that have been mostly vacated by employees who prefer to work remotely.
Despite the fact that there is systematic stress in commercial real estate, the other portfolios are functioning well, according to Santomassimo. There may be some sustained pressure in the CRE portfolio, but it is unlikely to be to the extent witnessed in recent quarters.
Wells Fargo Layoff Criteria in the Mortgage Business
Charles W. Scharf spoke to employees at a town hall meeting on Jan. 25 and restated his rationale for the mortgage reduction.
While this recent wave of Wells Fargo layoffs was not based on employee performance, Wells Fargo has been laying off mortgage workers who fail to reach minimum output criteria.
According to one of the sources, in locations with costly properties, that might mean at least $10 million in loans during the last year.
Last month, the bank reported that mortgage volumes fell 70% to $14.6 billion in the fourth quarter. Wells Fargo stated that it will have about 11,000 fewer employees at the end of 2022 than it did in 2021.
According to one of the sources, the January mortgage announcement, which was first reported by CNBC, prompted recruiters to surround high performers in the hopes of stealing them.