WFC Wells Fargo and Company

By Josh Beckerman 

Wells Fargo & Co. on Thursday said it would reduce jobs as part of its "ongoing transformation" to address industry trends and changes in customer behavior.

The bank expects head count to decline by about 5% to 10% within the next three years, which includes displacements as well as normal attrition.

Wells Fargo had about 265,000 team members at the end of the second quarter.

Chief Executive Tim Sloan, in a regularly scheduled employee town hall meeting, discussed Wells Fargo's progress in becoming more customer-focused and streamlined. "This work includes strengthening risk management, simplifying operations, leveraging digital automation, divesting noncore businesses, and continuing to become a more efficient company," Mr. Sloan said.

Wells Fargo shares recently traded up 0.7% at $55.64.

The bank has contended with a variety of issues, including a sales scandal at its consumer bank and claims of gender bias at its wealth-management unit.

On Thursday morning, S&P Global Ratings affirmed its ratings for Wells Fargo, saying it "continues to generate relatively solid earnings and maintain decent customer flows despite persistent reputational issues and elevated legal risks."

S&P noted that "governance, compliance, and control deficiencies have surfaced" in several business areas, but Wells "is addressing these issues using a multifaceted plan."

When it reported earnings in July, Wells Fargo said second-quarter teller and ATM transactions declined about 5%. The bank has said it plans to reduce its retail-bank network to about 5,000 branches by the end of 2020, through consolidations and divestitures, down from more than 5,800 at the end of 2017. In June, it announced a deal to sell 52 Midwest branches to Flagstar Bancorp Inc.

Mr. Sloan said Thursday that "we have robust programs to make impacted team members aware of other job opportunities within Wells Fargo and provide support as they transition to the next phase of their careers."

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

September 20, 2018 16:11 ET (20:11 GMT)

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