Wells Fargo is continuing with its massive job cuts, as the struggling institutional lender hopes to reduce overhead expenses and deal with an ongoing global health disaster on top of other financial matters that have weighed down on its operations.
The bank disclosed last month that it would roll out an extensive retrenchment measure this year as it prepares for huge losses brought about by the coronavirus pandemic. The bank's executives said they expect to see closures and reductions in third-party expenditures as well.
According to Wells Fargo spokesperson Beth Richek, they resumed cutting their workforce early this month, without giving out any details. Early last month, Bloomberg reported that the bank was looking to carry out more crucial steps in the coming months that may lead to tens of thousands of jobs being ended. Wells Fargo pointed out that it will provide separation pay and career assistance to employees who will be included in the termination list.
The San Francisco-headquartered lender has allotted billions of dollars for loan losses made worse by the pandemic's impact on the U.S. economy. Further, it is pressured by a $2 trillion asset cap that the central bank has implemented upon the group.
The latest moves by Wells Fargo came as chief executive officer Charles Scharf plans to wrap up a strategic evaluation of the group that he introduced when he joined the company last fall.
The Federal Reserve asset cap is a form of sanction for a long list of delinquencies that beset the bank in 2010, most notably a controversy in which bank personnel made thousands of bogus deposit and credit card accounts using clients' names.
Major banking groups in the U.S. had suspended decisions with regards to employment reductions when the pandemic started to worse, with bank executives disclosing they have no idea how long the crisis would drag on and affect the global financial market. They also said they are not sure what measures to take if business unexpectedly snaps back.
Wells Fargo is considering trimming the size of its headcount through a mixture of "attrition," and the removal of open positions and other displacements, Richek stressed, as the bank attempts to build a more robust and efficient organization.
Meanwhile, a transformation is already taking shape in the lender. Chief financial officer John Shrewsberry will resign this year after more than two decades with the bank. Chief compliance officer Mike Roemer will also depart after only two years in the position.
