Wells Fargo WFC is laying off less than 50 bankers from its corporate and investment banking (IB) segment as part of year-end pruning, per Bloomberg News.
Particularly, Wells Fargo is shedding a number of managing director positions and more junior roles. This comes as part of the bank’s cost-cutting effort amid a high interest rate scenario and geopolitical tensions that have curbed a rebound in IB.
As of Sep 30, the company had 227,363 employees, down 5% from a year ago.
“Like all well-managed organizations, we regularly review and evaluate the needs of our clients and the markets we serve in order to ensure we align our resources accordingly,” Wells Fargo noted in a statement to Reuters.
“These departures represent a small number, and we remain fully committed to our Corporate & Investment Banking business.”
Markedly, WFC’s prudent expense management initiatives support its financials. Expenses witnessed a negative compound annual growth rate of 0.5% over the last three years (ended 2022). The declining trend continued in the first half of 2023.
Expense reduction efforts, such as streamlining organizational structure, closing branches and reducing headcount undertaken from third-quarter 2020, have been aiding expense management. The company delivered gross expense savings aggregating $7.5 billion in 2021 and 2022. WFC expects to continue with these efficiency initiatives in 2023. Such efforts are likely to support bottom-line growth amid pressure on revenue growth.
Over the past six months, shares of Wells Fargo have gained 11.1% compared with the industry’s rise of 9.6%.
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Currently, WFC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Companies With Similar Moves
Citigroup Inc.’s C managers and consultants working on its reorganization plan have discussed job cuts of at least 10% in several major businesses. The news was first reported by CNBC, which cited people with knowledge of the process.
Citigroup’s reorganization, internally known as “Project Bora Bora” per CNBC, will simplify the Wall Street giant’s business and boost its stock price. While the move was expected to result in job cuts, the scale of layoffs and cost savings will be estimated in the current quarter.
The workforce reduction plan will eliminate co-heads, regional managers and other employees with overlapping responsibilities.
Per a Reuter’s article, Charles Schwab SCHW has laid off 5% to 6% of its total headcount. SCHW’s move is to cut rising costs, per a company spokesperson.
SCHW’s reduction amounts to between 1,795 and 2,154 people out of its 35,900 workforce.
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