For Immediate Release
Chicago, IL – November 23, 2011 – Zacks.com announces the list
of stocks featured in the Analyst Blog. Every day the Zacks Equity
Research analysts discuss the latest news and events impacting
stocks and the financial markets. Stocks recently featured in the
blog include Wells Fargo &
Company (WFC), Citigroup Inc.
(C), Bank of America Corp. (BAC), Bank of
New York Mellon Corp (BK) and State Street
Corp. (STT).
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Here are highlights from Tuesday’s Analyst
Blog:
Wells Fargo Plans Layoffs
Wells Fargo & Company (WFC) is mulling over
retrenching technology and operations workers as part of its cost
containment measures, according to Reuters. The company
will take this initiative with an aim to reduce about $1.5 billion
quarterly operating expenses.
Moreover, according to sources, the bank is planning to layoff
approximately 25 staff and removed 30 unfilled positions. Wells
Fargo plans to reduce quarterly expenses for technology and staff
by $188 million, and therefore more number of headcounts can be
reduced in this area.
The ongoing Project Compass, the efficiency program of Wells
Fargo, which was initiated at the end of 2010, aims at eliminating
jobs to reduce expenses. Under the project, Wells Fargo targets to
trim down quarterly expenses to $11 billion in the fourth quarter
of 2012 from $11.7 billion in the third quarter of 2011. Apart from
reducing jobs, the company plans to achieve its target through loss
alleviation and foreclosing assets. These initiatives will be
executed in the upcoming quarters.
Wells Fargo remains committed to expense management, but not at
the cost of any negative impact on its revenue. Project Compass is
a company-wide initiative focused on removing unnecessary
complexity while eliminating duplication as a way to improve the
customer experience along with the work process of its team
members.
Previously also, Wells Fargo has cut 49 jobs in its financial
card collections department in Sioux Falls. In January 2011, Wells
Fargo also announced to trim 120 workers in its student loan
operations, including many in Sioux Falls, though the company
planned to transfer most of the employees to other units.
In March 2011, Wells Fargo declared that it will lay off
approximately 200 employees, including 82 employees in San Antonio,
30 in Addison and 67 in Bedford, Texas in its home mortgage
division. Wells Fargo employs about 13,000 people in metro Des
Moines. The company’s Home Mortgage division, which is based in
West Des Moines, captures approximately 25% of the U.S. home
lending market. Wells Fargo also announced the elimination of 68
positions at a Vancouver call center, which supports collection of
loans for Wells Fargo Financial division.
Many large Wall Street banks have started reducing their
workforces to cut costs following the slowdown in economic and
market activity. Further, some large Wall Street banks are laying
off employees due to weak trading volumes and stringent regulations
on some parts of their business.
Wells Fargo is not the only institution doing this dirty job of
rendering so many jobless. Among other U.S. banks, last week,
Citigroup Inc. (C) planned to layoff 3,000 workers
as part of its cost containment measures. Citi plans to slash 900
jobs from its securities and banking division. The move came on the
back of turmoil in equity and debt markets.
In September, Bank of America Corp. (BAC)
planed to retrench 40,000 workers under the first phase of a
proposed restructuring program for recovering its financial
position. Moreover, in August, Bank of New York Mellon
Corp (BK) stated that it will slash about 1,500 jobs,
which represents about 3% of its total workforce. State
Street Corp. (STT) also intends to let go 850 technology
jobs through layoffs and outsourcing.
Overall, until revenue generation revives, a hideous
cost-to-income ratio will continue to force many more banks to
reduce costs through job cuts as they need to maximize profits in
order to boost capital ratios. Of course, everyone will now keep
their eyes on the weak performing firms that have not yet announced
job cuts.
Wells Fargo currently retains its Zacks #3 Rank, which
translates into a short-term ‘Hold’ rating.
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BANK OF AMER CP (BAC): Free Stock Analysis Report
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CITIGROUP INC (C): Free Stock Analysis Report
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WELLS FARGO-NEW (WFC): Free Stock Analysis Report
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