The moratorium on job cuts at Wells Fargo & Co. is over.
Bloomberg News reported the San Francisco-based global financial services company has launched a long-term cost-cutting effort.
Facing pressure to reduce costs, Wells Fargo said it has ended a moratorium on layoffs as it prepares for cuts that could total in the billions.
“Starting in early August, we resumed regular job displacement activity ... we are at the beginning of a multiyear effort to build a stronger, more efficient company,” Beth Richek, a bank spokesperson, said in a statement. “We expect to reduce the size of our workforce through a combination of attrition, the elimination of open roles and job displacements.”
Wells Fargo declined to reveal how many jobs would be cut. But sources told Bloomberg last month that tens of thousands of positions could be cut to trim costs.
Scott Siefers, managing director at Piper Sandler Cos., a Minneapolis-based investment bank and financial services company, told Pension & Investments (P&I) he expects branch closures and job cuts.
“Any sizable cost-cutting program will unfortunately have a human element to it,” he said.
Brian Kleinhanzl, an analyst at New York investment bank Keefe, Bruyette & Woods, told P&I job cuts would likely come in the company’s asset management division.
In a conference call with analysts last month on second-quarter earnings, CEO Charles Scharf repeated his previous comments that the company’s expenses are too high.
“For us to bring our level of efficiency close to our peers, the math would tell you, we need to eliminate over $10 billion of expenses,” he said.
Also on the call, Scharf said employees had been told their jobs will disappear, but the company was waiting to get through the initial stages of the pandemic.
In Q2 revenues hit $17.8 billion, down from $21.6 billion for the same quarter last year. The hit resulted in a 66 cents per share loss, short of analysts’ estimates of $18.4 billion in revenues and 20 cents per share in the red.
Nico Marais, CEO of Wells Fargo Asset Management, told P&I while the $578 billion money manager is hiring it is also keeping an eye on costs so it can invest in growth while increasing margins.