Wells Fargo & Co. has started a multiyear cost-cutting effort that will encompass "a broad range of actions, including workforce reductions, to bring our expenses more in line with our peers and create a company that is more nimble, streamlined and customer-focused," the company said in a Tuesday statement provided to Pensions & Investments.
A spokeswoman at Wells Fargo said in email that the expense-cutting plan is a "companywide initiative," that applies to "all lines of business and functional areas" of Wells Fargo. Furthermore, analysts who spoke to P&I said they believe the efforts will have at least some impact on the asset management unit.
"Wells Fargo & Co. is at the beginning of a multiyear effort to build a stronger, more efficient company for our customers, employees, shareholders and other stakeholders," the statement from Wells Fargo said.
As part of the plan, Wells Fargo expects to "reduce the size of our workforce through a combination of attrition, the elimination of open roles and job displacements," the statement said. "We are executing this work in a thoughtful and deliberate manner, and we will communicate openly and honestly with impacted employees and provide severance, career assistance and other services to assist them."
The firm declined to comment on how many jobs would be eliminated, but in early July sources familiar with the matter told Bloomberg that the San Francisco-based bank might ultimately cut tens of thousands of positions to reduce costs.
During a July 14 earnings call, Wells Fargo management first signaled that the bank needed to undergo significant expense cuts.
Wells Fargo CEO and President Charles W. Scharf said during the earnings call: "For us to bring our level of efficiency close to our peers, the math would tell you we need to eliminate over $10 billion of expenses."
Regarding the expense-cutting plan, Mr. Scharf later noted that "we have a series of employees who've been told that their jobs will ultimately go away, but we are going to let some time pass as we got through the stages of the COVID crisis."