Arthur J. Villasanta – Fourth Estate Contributor
San Francisco, CA, United States (4E) – Scandal-wracked Wells Fargo & Company, Inc will dismiss up to 10% of its workforce over the next three years to cut rising costs and battle a growing customer preference for digital banking that weakens its operations and diminishes the need for branches.
The California-based bank employs more than 265,000 people and runs over 6,000 branches.
CEO Tim Sloan told Wells Fargo employees during a companywide town hall meeting yesterday that the job losses will involve firings as well as normal attrition The downsizing plan will see as many as 26,500 Wells Fargo employees lose their jobs under a 10% reduction.
Sloan told employees the downsizing was a response to “changing customer preferences, including the accelerating adoption of digital self-service capabilities.” He also cited an “ongoing commitment to efficiency.”
“Wells Fargo takes very seriously any change that involves its team members, and as always, we will be thoughtful and transparent and treat team members with respect,” said Sloan.
“We have robust programs to make impacted team members aware of other job opportunities within Wells Fargo and provide support as they transition to the next phase of their careers. And even as we become more efficient, Wells Fargo will remain one of the largest employers in the United States.”
Sloan also pledged that the bank would keep employees informed as the workforce downsizing proceeds.
The employee meeting was the latest in a series of Wells Fargo meetings about the company’s transformation plans amid severe competition and the fallout from a raft of scandals over unauthorized accounts extending back years.
Analysts expect Well Fargo to close a significant number of its branches as it tries to shave costs. Among the hardest hit by the layoffs will be bank tellers. Still others say the downsizing won’t have much of an impact on the bank’s bottom line.
The planned firings come as Wells Fargo tries to regain the confidence of customers and investors following a scandal over an estimated 3.5 million bank accounts and other financial products that may have been opened without customer authorization.
The bank was hit with $185 million in civil penalties in Sept. 2016. In April 2018, the bank agreed to pay $1 billion in civil penalties to the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency over mortgage and auto loan violations that forced customers to pay extra fees.
This February, Wells Fargo agreed to a consent order with the Federal Reserve over “consumer abuses and compliance breakdowns.” The agreement restricted Wells Fargo’s growth and required the bank to replace four of its board members.
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