WFC Wells Fargo and Company

By Emily Glazer and Josh Beckerman 

Wells Fargo & Co. plans to cut as many as 26,500 jobs over the next three years as it adjusts to changing consumer behavior and works to recover from a series of scandals that have gripped the bank for the past two years.

The bank on Thursday said it expects head count to fall by about 5% to 10%, including layoffs as well as typical attrition. Wells Fargo had about 265,000 employees at the end of the second quarter.

The cuts are occurring as Wells Fargo contends with a number of federal and state investigations after a fake-account scandal in its consumer bank exposed problems throughout all of its major business units. It is also under a Federal Reserve imposed asset cap, limiting its growth.

The bank's profit and revenue have been falling over recent quarters as it restructures some of its major businesses, in part due to regulatory scrutiny. It has also divested a number of businesses over the past three years.

Chief Executive Timothy Sloan announced the job reductions in an employee town hall meeting, saying they would advance the bank's efforts to streamline and become more customer-focused.

"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.

On Thursday, Wells Fargo shares closed up 0.6% at $55.55.

Wells Fargo is in the midst a firmwide expense cutting plan, aiming to trim $4 billion by the end of 2019. Inside the bank, a lot of the focus on expense cuts is known as "E&E," short for the effectiveness and efficiency initiative, spearheaded by Chief Financial Officer John Shrewsberry.

Many of its main business units already have felt the changes.

In recent months Wells Fargo has been integrating its corporate and investment bank, which has led to ongoing layoffs, The Wall Street Journal has reported. It is also r estructuring its wealth and investment management unit, an effort that could lead to around 1,000 job cuts through attrition, the Journal reported. In late August, it announced about 750 layoffs, largely in its mortgage business.

Wells Fargo also has cut jobs in its retail bank, which bore the brunt of the fallout from the sales practices scandal. In May 2017, the bank said it would close 450 branches in 2017 and 2018. In June, the bank said it was selling 52 branches as part of those branch reduction efforts.

Write to Emily Glazer at emily.glazer@wsj.com and Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

September 20, 2018 18:39 ET (22:39 GMT)

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