Pensions & Investments is reporting Wells Fargo & Co. is planning job cuts that could ultimately impact 20 to 25 percent of its workforce, or 50,000 to 66,000 jobs. If correct, as many as 4,000 jobs in the Twin Cities could be eliminated.
The Twin Cities ranks as the second-largest concentration of Wells Fargo employees in the United States. In 2014, it employed 20,000 people in Minnesota, 18,000 in the Twin Cities (7,000 in downtown Minneapolis, and this was before it spent $217 million to build new office towers, where it consolidated even more jobs). Layoffs in recent years have brought those numbers down to about 18,000 statewide and 16,000 metro-area employees. Slashing 25 percent across the board would mean 4,000 jobs in the Twin Cities.
From Pension & Investments: “San Francisco-based Wells Fargo began notifying employees in August in a first round of layoffs, and will be ‘winding down their roles in October,’ with additional rounds of cuts to continue through 2021, an anonymous source with knowledge on the matter told Pensions & Investments. Anywhere from 25,000 to 50,000 jobs are being targeted in the workforce reduction plans, and pending cuts are expected to impact all areas of the business including Wells Fargo Asset Management, the source said. Another source who spoke under the condition of anonymity said Wells Fargo was targeting a workforce reduction of up to 25% of staff, or around 66,000 employees.” Here’s the complete story from Pensions & Investments.
In July, a Bloomberg Law report said layoffs could be in the tens of thousands, citing people familiar with the matter.
Wells Fargo is neither confirming nor denying the 20-25 percent range, and instead will only say that it hasn’t set a specific target in terms of total job reductions (layoffs, attrition and the elimination of open roles).
“It’s a multi-year effort” to build a better company through a range of actions including workforce reductions “to bring our expenses more in line with our peers and create a company that is more nimble, streamlined and customer-focused,” said Steve Carlson, V.P. of Wells Fargo corporate communications serving Iowa, Illinois, Minnesota and Colorado.
“Each business line and function is conducting comprehensive analyses to identify duplication, low-value activity, manual processes and other opportunities to improve how we operate,” he said.
As for Minnesota, all he would say is that “we can expect impacts, including job reductions, in most geographies across our footprint and nearly all of our business lines and functions.”
Will there be a point in time when Wells Fargo will share more details about job reductions? “I don’t know the answer to that,’ Carlson said, “but it would not be any time in the near future.”
Separately, Moody’s Investors Services today downgraded Wells Fargo from “stable” to “negative,” saying the change “reflects Wells Fargo’s slower than anticipated pace in resolving its legacy governance, oversight, compliance and operational risk management deficiencies.” (More here.)
This follows by one day Wells Fargo’s agreement to pay $2.12 million in fines and restitution to settle U.S. regulatory charges that its brokers failed to properly account for the costs of switching customers who owned variable annuities to new investments.