The company’s agricultural lending division, which gives loans to farmers, was cut by at least 25 percent, while the bank also laid off about 7 percent of the staff from its energy lending group over the summer. Both divisions typically have been strong portfolios for Wells Fargo.
Representatives for the lender confirmed the layoffs, but did not go into specifics. The company has about 6,000 commercial bankers in the United States.
The sources added that many of the agriculture cuts were in rural areas, including North Dakota and South Dakota, which both saw its teams cut in half. As a result, some small companies and family farmers will now need to find new lenders.
Despite the cuts, a Wells Fargo executive told Reuters the company plans to retain its position as the biggest bank lender to the U.S. agriculture sector, and that the layoffs were a way to ensure that it serves clients who do more business with the bank. With that in mind, it is currently hiring agricultural bankers in markets like California, Wyoming and Idaho.
However, federal data showed that Wells Fargo has been cutting back on its agricultural loans, with its Federal Deposit Insurance Corporation (FDIC)-insured units slashed $1.24 billion, or 15.3 percent, between the end of December 2016 and June 30 of this year.
As for the energy sector, Wells Fargo’s energy team has been trying to recover from losses it experienced in 2016 when crude prices fell to $26 a barrel, leading to several bankruptcies in the sector. But Wells Fargo spokeswoman Hannah Sloane said the bank is committed to the sector and has expanded the business over the past three years.
“We regularly review and evaluate the needs of our clients and the dynamics in the markets we serve in order to ensure we align our resources accordingly,” she said.