Wells Fargo has announced the layoff of an additional 14 workers at its Jordan Creek campus in West Des Moines, and the company's CEO in November comments suggested the workforce cuts at what was once the metro's largest employer could continue.
The latest cut, announced on Iowa’s Worker Adjustment and Retraining Notification, or WARN, site will be effective Jan. 23. Since September, Wells Fargo has pared 127 workers in five rounds of layoffs. It has cut 1,368 jobs since April 2022, according to WARN data, with many more jobs lost to attrition.
Wells Fargo's Des Moines metro employment peaked at 14,500 in 2017 but it has since fallen to what the Greater Des Moines Partnership says is “more than 11,000.” That's eclipsed by the 12,000-plus workers at the Hy-Vee supermarket chain, which has its headquarters in West Des Moines.
The latest Des Moines metro layoff notices did not indicate in which divisions Wells Fargo was reducing jobs, and the company has declined to specify when asked in previous layoffs. The bank’s home mortgage division, heavily concentrated in the Des Moines metro, has throttled back amid higher interest rates and lower demand.
“We regularly review and adjust staffing levels to align with market conditions and the needs of our businesses. We work hard to identify opportunities for employees in other parts of the company so we can retain as many employees as possible," Wells Fargo said in the standard statement it issues when layoffs occur. "Where it’s not possible, we provide assistance, such as severance and career counseling,”
In an early November interview with Reuters, Wells Fargo CEO Charlie Scharf said he expects banking workforce to continue to decline as financial institutions focus on efficiency.
"It's likely we'll have less headcount as we look forward," Scharf said, adding, "We'd like to do much of it through attrition as possible."
He noted that the San Francisco-based bank had 275,000 employees when he joined in 2019 and has a little more than 210,000 currently.
Barrier to growth removed, but efficiency the focus for now
The U.S. Federal Reserve removed a $1.95 trillion asset cap on Wells Fargo in June, opening the door to renewed growth after a 2016 fake-accounts scandal that cost it a $3 billion settlement.
At the same time, the bank is focused on becoming more efficient and cutting expenses.
"Headcount is the outcome of the conversations that we have about, 'We're way too inefficient, we're way too bureaucratic, we have way too many processes inside the company that don't add value,'" Scharf told Reuters.
He also said artificial intelligence could facilitate workforce reductions.
"The opportunities that exist in AI are very significant, and anyone who sits here today and says that they don't think they'll have less headcount because of AI either doesn't know what they're talking about or is just not being totally honest about it," he said.
Though with the assets cap lifted, Wells Fargo has more freedom to expand through acquisitions, Sharf told Reuters that mergers and acquisitions ? M&A for short ? are not currently a priority for the fourth-largest U.S. lender.
"We don't feel the pressure to do any M&A whatsoever," he said, adding, "We have amazing opportunities in every one of our businesses, we have scale in everything that we do."
Still, Wells Fargo could be interested in buying another lender "at the right price" in appealing geographies, he said, without naming the areas. Payments and wealth management are other sectors in which the bank could add capacity, he said.
Scharf noted Wells Fargo's assets exceed $2 trillion since the cap was lifted.
Kevin Baskins covers jobs and the economy for the Des Moines Register. Reach him at [email protected].
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