Thread regarding Wells Fargo & Co. layoffs

What is the scoop from audit - that is key

Most of you may not appreciate this point and as a veteran of Wells Fargo I have come to see some patterns over the years.

  1. When the problems are rampant, control groups in the three lines of defense (front line risk groups, second line risk and compliance and the third line or audit services) are actually smiling and their ranks increase in size . The last few years should illustrate this point very clearly .
  1. Despite the news items that say Wells Fargo has not laid off people for several years, there have been small scale reorga resulting in people being ‘displaced’ - euphemism for laid off. The control groups were untouched.
  1. For any senior management , it is important to send a signal to the Board and the investment community that ‘this time it is different and we mean business’. More than the actual act of letting people go and other cost reduction measures , making a statement to the public is far more important
  1. Internal Audit is often the canary in the coal mine. Audit is usually safe. . It generally sends a very bad message to the regulators when auditors are fired . But when the situation is really dire, it will be foolish for audit to justify growing when the firm is shrinking.

The last point is the most important for those who are predicting what is happening next. For anyone reading this post who is familiar with the inside scoop from audit , I will look into those reports very carefully. If audit has stopped hiring - that will be very telling that we have a huge layoff of the biggest kind coming .

Who in audit can shed light on this ?

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| 5124 views | | 12 replies (last July 15, 2020) | Reply
Post ID: @OP+15TTjWnS

12 replies (most recent on top)

Original post is spot on. Internal audit is "the canary in the coal mine." This thread also brings up two important points: 1. High level of control/audit/governance overhead, checkers checking checkers. 2. A lot of effort to clear MRA or other business initiative, then it still fail.

Much of what six figure audit/control/risk do is basic file clerk work – and they still do it poorly. Genius at risk management, but make them cut-n-paste all day drives then nuts. Then again there are many not suited for the job yet promoted anyway.

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Post ID: @4dxv+15TTjWnS

Thanks for that @31rb. Are you in IT audit or business? . IT audit was recruiting till recently. I saw one guy move internally into IT audit in the last few months as well.

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Post ID: @4juf+15TTjWnS

I’m in audit at a manager level. The signaling is that no one really knows. Julie Scam has cut off all communication with the teams so nobody in audit has any clue when things are coming. Julie just drops them and everyone scrambles below her.

As another poster responded, audit has not been backfilling recent departures (and it’s been mass exodus as everyone is jumping ship). The hiring freeze started in the mid February timeframe.

Audit has lost a lot of good people since then. We are currently operating below the headcount required to complete the audit plan (and by a good margin). So I think for the most part Audit’s lay-off already happened and it simply natural attrition.

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Post ID: @3lrb+15TTjWnS

I am in audit and have not heard any lay-off talk. Hiring has essentially paused though, outside of senior manager (VP) level and above. It was common to have 25-40 open requisitions at any given time over the past Couple years but now that number is usually less than 3. They did also just essentially merge the role of Manager and Principal Auditor though, so it will be interesting to see how that works out, along with the “Spans and layers” talk.

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Post ID: @2ocp+15TTjWnS

The OP is about a lay-off and not about people being asked to leave due to the regulatory pressure . Hey he head of the audit was asked to go. That is different from a mass layoff

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Post ID: @1vtr+15TTjWnS

audit has been on the chopping block for awhile- they let go a lot of director level (rightly so for not properly overseeing risks); and then started implementing policies that would make their employees want to leave.. They were not hiring before COVID.

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Post ID: @1frg+15TTjWnS

duplicitive functions also mean EGS

if you have EGS on your team you are in for a layoff

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Post ID: @1vpg+15TTjWnS

@rej you forgot about the teams that were created just to have people perform data entry into SHRp that all of the testing teams/IRM used to do themselves and still can't even copy and paste correctly. or the GIM team that doesn't even understand issues yet somehow is responsible for them, inserting another layer of confusion and frustration. People makng six figures doing the work of file clerks .... badly

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Post ID: @1lir+15TTjWnS

The point about duplicative functions is spot-on:

Tech controls , IRM, enterprise testing and audit - the work gets done four times and it still does not close the MRA.

I know of a team in IRM that is literally duplicating the enterprise testing function, box by box in the org chart, and calling it "control framework oversight".

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Post ID: @rej+15TTjWnS

My group displaced 13 people in Nov. 2019. During my yearly performance review in the spring of 2019, my manager said no layoffs through the end of 2020. Wrong.

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Post ID: @cfx+15TTjWnS

To the OP: really useful pointers on the ‘Ways of the Stagecoach” - a great organization that just ke going downhill.

As far as the control groups go, we have many groups that are just reviewing each other’s work. The number of revenue generating employees is probably less than 30%.

The control groups have been beefed up in the last 5 years but they have not had the same impact as one would expect. There are many testing groups that test controls : tech controls , IRM, enterprise testing and audit .

And inspire of all this, we fail regulatory validation . Why ? Because these groups are really not allowed to do their job properly. Inept bosses are involved in changing the message and the regulators get a different message than what the results showed.

Audit in particular needs to be thoughtful and improve its competency. They are the last canaries in this canary chain, remember.

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Post ID: @pyd+15TTjWnS

Wholesale Control currently has 3300 employees. The two new CIB and CB control groups will have 380 and 300. It's not just canaries that won't be making it out alive. Yes many will move to other risk jobs but the group grew way too fast with too many managers managing a handful of people and others sitting with no work but big dreams.

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Post ID: @liq+15TTjWnS

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