I've always been confused by this and maybe someone who knows more about hiring/budgeting can clarify. Why do companies so often lay people off even when the company is doing well (as wells fargo is). I can understand there are instances where perhaps an entire office is closing or a branch, but outside of that I'm unsure why banks lay people off/reluctant to hire when they are doing well?
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Ok kiddies, pay attention while your Uncle tells you the truth your parents are too chicken-sh-t to say.
The "layoffs" are less about cost reduction than massively changing the culture of the Company from the pre-Scharf regime. In their oh-so-insightful East Coast Elitist eyes, anyone here before then is a problem and directly led to the Sales Practice scandal. If you only worked at Wells and never another Bank, you're double-dirty.
So, look at who is getting laid off....remote people (typically approved by the old regime), second/third tier locations (approved by the old regime), LoBs like Wealth Mgt servicing, mortgages, etc, that were cornerstones of the old regime operations.
This has been confirmed by multiple comments from post-Scharf senior executives; most recently one in the Digital space said she, er, they, had no problem laying off anyone hired before she, er they, got here but that was it.
To have a hope of survival:
- Quit bi--hing about RTO, you spoiled fu--ing pu----s. If your job can be done from home, it can damn sure be done from India.
- Kiss the a-s of anyone in your leadership chain who came in from BofA, JPM, or Citi. Secure their mentorship/sponsorship.
- GTFO of any location that's not identified as core to your LoB.
- GTFO of any LoB/EF that doesn't have a clear connection to generating revenue.
- Take on more work and make damn sure your value-add exceeds your total comp; do it with a big fu--ing grin.
You're welcome.
I honestly don't believe that these execs give an S about expenses. These clowns just brought $500M of office space no one needs. They continue to spend money on admin buildings. They established a hub in the most expensive city in America and hired countless executives to work there. They don't care what things cost so long as the owner of the supplier is sufficiently "diverse". They have a legion of DE&I positions that bring a negative amount of value to the company. Money is wasted CONSTANTLY and if you raise a hand on it, all you get is a shrug and a reminder that we have to acquire things via the approved channels, even though they are 2-5x the price other options.
I think layoffs are more about getting rid of what Hudson Yards thinks of as tainted employees. If you started before Chuckles he hates you and wants you gone. Any savings associated with this is a fringe benefit.
Wells Fargo needs to be broken up to smaller banks.
The company is not doing well. You have to look at more than net income. Banks have an allowance for loan loss that must be taken into consideration.
If seeking a forward view, look at the stock price. It’s not looking good.
It's all about the EXPENSE RATIO and PE RATIO! We are being judged by those ridiculous numbers on the paper. This is equivalent to your school GPAs folks.
companies are not jobs programs, that's what military spending bills are for. companies make money and if they can make the same widget with less people then they will do so. While I don't like the $hotgun approach they are taking, we are a bloated company and as a result people need to go.
WF employees are bloated. They must reduce headcount to compete. Bigger banks have fewer employees because they are efficient at what they do.
WF has almost 5000 Branches. Citi has 600 and is bigger than WFC in market share. If WFC closed down at least half of the branches they would add to the net income of at least 2 Billion per year if you count salaries/rent/expenses. That’s around 15 %!increase in net income per year. Ok, now give me my 20 million dollar bonus.
Layoffs have nothing to do with large corporations making money and everything to do with CEOs FOMO.
Because companies don't have an objective to hire or maintain maximum number of employees possible.
Employees are a necessary evil/expense.
If a company becomes more efficient and can reduce headcount, it will.
Wells Fargo is bloated compared to its peer large banks. Wells has MORE employees than Bank of America but far less revenue (data right off Wikipedia). It is the CEO's job to fix this gross inefficiency.
WFC is out or levers to pull to make material improvements to earnings. So focus is on what it can control. That’s cutting US jobs. Adding higher % of jobs in I/P
There is a massive compensation package awaiting Charlie and the leadership team when the stock price rises. The stock price is, over the long term, determined by the expected value of future earnings, and those earnings increase as WF reduces expenses. When WF compares its operating expenses as a % of assets with other banks, we’re not faring well, and reducing headcount is the easiest and most direct way for companies to reduce expenses.
Oddly, during the early 2010s, the WF operating expense ratio was the lowest of the big banks. At the time we said it was due to our cross-sell practices, but we have since learned that the low ratio stemmed from underfunding critical IT, operational, and risk programs. (That’s another way to reduce expenses—by not investing in the future.)