- Wells Fargo has cut more than 700 commercial banking jobs across the division
- The layoffs are expected to affect 'nearly all functions and business lines'
- Comes after the bank resumed layoffs in August after pausing redundancies in March due to the COVID-19 pandemic
By Reuters and Karen Ruiz For Dailymail.com
Published: | Updated:
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208 View commentsWells Fargo has cut more than 700 commercial banking jobs as part of workforce reductions that could ultimately impact 'tens of thousands' of staff, according to a new report.
The San Francisco-based company has made layoffs for positions across the whole division,Bloomberg reported on Wednesday, citing people with knowledge of the matter.
It comes after the bank became the first major lender to resume job cuts in early August after pausing layoffs in March due to the COVID-19 pandemic.
A company spokesperson on Wednesday confirmed the commercial banking sector has seen 'job displacements' which are expected to extend to 'nearly all functions and business lines.'
Wells Fargo has cut more than 700 commercial banking jobs across the division in the first round of layoffs expected to affect 'tens of thousands' of employees
'We are at the beginning of a multiyear effort to build a stronger, more efficient company for our customers, employees, communities and shareholders,' spokeswoman Katie Ellis told the news outlet.
The cost-cutting effort will see the bank 'reduce the size of our workforce through a combination of attrition, the elimination of open roles and job displacements.'
Ellis said the company is yet to set a target for total number of job reductions.
Wells Fargo said in July it would launch a broad cost-cutting initiative this year as the bank braces for massive loan losses caused by the pandemic and continues to work through expensive regulatory and operational problems tied to a long-running sales scandal.
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Layoffs, branch closures and cuts to third-party spending are on the table, the bank's executives had then said.
Big US banks had postponed decisions about staff cuts when the virus outbreak first began to take hold, with executives saying they were unsure how long the outbreak would hurt the economy and worried about being unprepared if business suddenly snapped back.
The coronavirus pandemic has affected major banking institutions across the globe, prompting many to make reductions to their workforce
Goldman Sachs Group Inc said last month it plans to move forward with 'a modest number of layoffs'.
Bloomberg reports about 68,000 job cuts are expected to take place at 30 banks across the world, the majority at London-based HSBC, which earlier this year announced plans to lay off 35,000 people.
At the end of the third quarter earlier this month, financial analysts were predicting big banks to report a 30 to 60 per cent plunge in profits on the year-ago period due to the pandemic-induced recession and near record low interest rates.
Citigroup Inc and Wells Fargo & Co, the third- and fourth-biggest US banks by assets respectively, were estimated to report net income down by about 60 per cent, according to I/B/E/S analyst survey data from Refinitiv.
JPMorgan Chase & Co and Bank of America Corp, which rank first and second in assets respectively, were predicted to show profits down about 30 per cent.
Pandemic-driven lockdowns have put tens of millions of Americans out of work and plunged the US into a recession.
US output is forecast to fall 3.7 per cent in 2020, the Federal Reserve said.
Wells Fargo did not immediately respond to Reuters request for comment.
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