Wells Fargo fired hundreds of mortgage bankers as part of a massive round of layoffs precipitated by the bank's recent strategic shift.
Under the leadership of CEO Charlie Scharf, Wells Fargo is withdrawing from once-dominant segments of the U.S. mortgage industry. Instead of maximizing its share of American home loans, the bank is primarily concerned with supporting its existing clientele and minority populations.
Scharf had addressed staff in a town hall meeting in which he restated his justification for the mortgage reduction.
CNBC reported that the layoffs affected some top performers, including a couple of bankers whose loan volumes exceeded $100 million last year and who had attended an internal sales seminar for high achievers.
Mortgage bankers and home loan advisors, who are compensated mostly based on sales volume, were among those laid off this week at Wells Fargo, according to people who declined to be identified discussing personnel concerns.
According to insiders, the company terminated bankers who operated outside of its branch footprint and consequently did not fit with the new strategy of catering to existing customers. These layoffs include bankers from the Midwest and the East Coast, according to one person.
Earlier this month, some of these individuals were flown to a resort in Palm Desert, California, for a seminar sponsored by their employer. Palm Desert is a luxury enclave recognized for its warm climate, closeness to Palm Springs, and golf courses.
It is typical practice in the banking industry to honor top salespeople with multiday gatherings held at opulent resorts and combining recognition, recreation, and educational sessions. In April, for instance, JPMorgan's mortgage division will host a sales conference.
A spokesman stated that the bank will continue to serve customers "in any market in the United States" through its centralized sales channel.
Although this most recent wave of layoffs was not based on employee performance, Wells Fargo has also been laying off mortgage workers who do not achieve minimal output criteria.
In locations with costly homes, this might have amounted to a minimum of $10 million in loans over the past year, according to one of the sources.
The bank reported last month that mortgage activity in the fourth quarter continued to decline, falling 70% to $14.6 billion. Wells Fargo reported that it will have approximately 11,000 fewer employees in 2022 than in 2021.
According to one person, the January mortgage news caused recruiters to mob top performers in an effort to seize them.
