On Oct. 8, Wells Fargo announced that 700 commercial banking employees would be sent home as the company looks ahead after a rough few months earlier in the coronavirus pandemic.
The announcement comes after Wells Fargo, the country’s third-largest bank, lost over $2 billion in the second quarter of 2020. The losses prompted the company to cut roughly $10 billion in expenses, nearly one-fifth of its annual $54 billion in spending. The company also set aside $9.6 billion to cover loans that defaulted as the pandemic waged on.
Wells Fargo spokeswoman Katie Ellis confirmed that reductions had taken place in a statement.
“We are at the beginning of a multiyear effort to build a stronger, more efficient company for our customers, employees, communities, and shareholders,” said Ellis. “As part of this work, we will have impacts, including job reductions, in nearly all of our functions and business lines, including commercial banking where we have started displacements.”
Chief Financial Officer John Shrewsberry told investors back in July that, in addition to job cuts and layoffs, the company would spend less on travel, consultants, and third-party service providers. He also noted that under Wells Fargo’s new CEO, Charlie Scharf, monthly analyses of the bank’s various internal businesses would be conducted to determine where costs can be cut.
Yet, even before the coronavirus, the company sought to cut costs after the bank was embroiled in controversy for its multiple accounts scheme. In July 2018, the bank planned to close 800 branches before the year 2020.
Wells Fargo joins other financial services companies like JP Morgan, Citigroup, and Goldman Sachs, who have also begun layoffs. The layoffs come despite many of these firms, such as Goldman Sachs, vowing not to lay off employees in 2020.