Wells Fargo Trims Small-Business Card-Processing Unit
November 14 2017 - 3:03PM
Dow Jones News
By Emily Glazer
Wells Fargo & Co. laid off about 50 employees as it
continues to restructure its credit-card processing business geared
toward small-business customers, a bank spokeswoman said.
The bank eliminated the positions Monday, people familiar with
the matter said. The affected employees were salespeople in the
part of Wells Fargo Merchant Services LLC focusing on retail bank
customers that are typically small businesses, they added.
Wells Fargo spokeswoman Sara Hassell added in a statement the
bank is reducing the number of employees in the business "to better
align with current volumes." She said Wells Fargo is committed to
finding other jobs within the company for those laid off where
possible.
Ms. Hassell also said the layoffs didn't impact other parts of
Wells Fargo Merchant Services that work with larger customers
elsewhere in the bank.
Wells Fargo offers merchant services in partnership with
payment-processor First Data Corp., which leases or sells
point-of-sale equipment to retailers and other businesses. Wells
Fargo collects a fee for transaction processing and a commission
from First Data on equipment leases and sales.
Bank of America Corp.'s merchant services business, which also
operates in conjunction with First Data, laid off around 250
employees in September as part of a digital push.
Wells Fargo's Ms. Hassell said the bank's layoffs were unrelated
to a coming 2018 rollout of a mobile app geared toward
small-business merchant-services customers.
Though the layoffs are happening while the business is going
through changes, it is just a drop in the bucket for the bank
overall. Wells Fargo had 268,000 employees as of Sept. 30, down 1%
from 270,600 the prior quarter and down slightly from the
year-earlier period, according to the bank.
Wells Fargo, which has been dealing with a sales-practice
scandal that erupted more than a year ago in its retail bank unit,
also has been working to restructure its merchant-services
business. The Wall Street Journal reported in April that it
overhauled the business after an internal probe found some
employees falsely reported customers' sales and pushed small firms
into costly contracts they didn't understand.
The bank previously fired at least two dozen employees for those
and related matters and reduced the incentives for using aggressive
sales tactics. Wells Fargo said in a statement at the time it had
taken "significant steps" over the past several years to strengthen
the business, including management changes.
Write to Emily Glazer at emily.glazer@wsj.com
(END) Dow Jones Newswires
November 14, 2017 14:48 ET (19:48 GMT)
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