Wells Fargo mulls job cuts amid loan losses
US bank Wells Fargo could be set to cut thousands of jobs as its profits dip and loan losses increase.
According to Financial Times sources, the bank is looking into the possibility despite announcing a freeze on new layoffs in March.
Wells Fargo is the third-largest bank in the US and employs more than 263,000 people globally. Yet it has had to cut dividends for the third quarter of the year to meet Federal Reserve rules.
Bloomberg analysts estimate that the bank could be left with a net income of just $9 million for the second quarter of 2020. The bank earned $6.2 billion in 2019.
The Financial Times source says that Wells Fargo is planning “a full strategic review”. Despite its pause on job cuts, the bank has not committed to stopping layoffs entirely.
Chief financial officer, John Shrewsbury, said earlier this year that the bank would have to resume expense cutting projects “at some point”.
The bank’s performance has historically disappointed in the wake of a 2016 scandal over fake accounts.
Wells Fargo was found to have pressured employees to cross-sell products and services. This lead workers to create millions of fake accounts using forged customer signatures.
The regulatory punishment Wells Fargo received included $3 billion in fines.
Wells Fargo’s fading fortunes has made it a target for larger US banks feeling acquisitive. Goldman Sachs is rumoured to be on the hunt for a major deal on Wall Street.