Wells Fargo Layoffs: Hundreds Lose Jobs Just Weeks After Celebrating Their Achievements

Wells Fargo has laid off hundreds of mortgage bankers just weeks after celebrating their employees through an internal sales conference for high achievers.

The company reportedly announced layoffs on Tuesday, even letting go of bankers who surpassed $100 million in loan volumes in 2022, according to a CNBC report.

Prior the layoffs, the company allegedly flew some employees to the luxurious Palm Desert, California, for a company-sponsored conference. The finance sector usually rewards top salespeople with multi-day events.

The fresh round of layoffs was triggered by the bank's recent strategic shift amid regulatory pressure and higher interest rates. The lending market is now focusing on home loans for existing bank and wealth management customers and borrowers in minority communities, per the same outlet.

Employees laid off this week were reportedly Wells Fargo mortgage bankers and home loan consultants who are compensated mostly on sales volume, according to the outlet's sources who wished to remain anonymous.

"We announced in January strategic plans to create a more focused home-lending business," a Wells Fargo spokesman said, as quoted by CNBC. "As part of these efforts, we have made displacements across our home-lending business in alignment with this strategy and in response to significant decreases in mortgage volume."

The company reportedly cut bankers who operated in areas outside of its branch footprint, including bankers across the Midwest and the East Coast, per the outlet's sources.

Last Jan. 10, the company announced that it would be exiting the Correspondent business and reducing the size of its Servicing portfolio.

"The strategic direction for the Home Lending business and programs to advance racial equity announced today will replace the 2016 and 2017 minority home ownership lending commitments made under prior leadership," Wells Fargo announced. The company appointed Charlie Scharf as CEO in 2019.

According to Forbes, Wells Fargo's net profit in 2022 fell by 40% to $12.1 billion after a $1.7 billion civil penalty and $2 billion in restitution for 16 million consumers ordered by the Consumer Financial Protection Bureau.

The order reportedly covered illegal fees and mishandling of auto loans, failures to grant mortgage modifications, and surprise overdraft fees on checking accounts.