Based on the $10bn reduction in expense from comparing WF to JPC the bank will have to layoff about 75,000 FTE's.
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I hardly ever have the need to visit my credit union in person.
I work at Wells, but there's no way in hades I'd ever bank here.
There is no need to guess at the number of branch closures, it was stated outright in the earnings call notes and at conferences where the CFO stated the target of 4000, that’s 1400 to close.
Think about it ...
First Union acquired Wachovia (and kept the Wachovia name).
Norwest acquired Wells Fargo (and kept the Wells Fargo name).
Wells Fargo acquired Wachovia (and retained the Wells Fargo name).
That's 4 HUGE banks coming together, over many years, resulting in a lot of bloat and redundancy.
Of course, there were SOME cuts with each acquisition, but not enough and so this is why we have terrible revenue-per-employee ratios when compared with peers. And there were OTHER acquisitions along the way, too - not only the ones mentioned - and substantial ones, at that. With such a multitude of different systems, technologies, philosophies & cultures merging together over a couple of decades, it's little wonder that there is so much inefficiency. Cuts need to happen for the bank's survival and that's just a fact.
It won't be 75k employees and this will happen over several years. Attrition will help somewhat but it seems 10-15k layoffs before year end would not be unreasonable.
@dqs Relatively small branch closure. Only 500 - 1000???? Lollll
The worst part of ignorance is that you still underestimated the true number. So many of you are so scrèwed. .
Advice:
Bail out now, before 30,000 more layoffs hit the streets. I went to the non-profit education sector 20 years ago and loved it. Good people, a large, private office, no O/T, great benefits.
We provided a service to the community, and they gave me a juicy pension in return.
Best wishes to you.
Retired and lovin' it !
Branch closures will be relatively small maybe 500-1000 branches where there is close proximity and low density. The layoffs will come from all LOB's and functions not only branches.
Headcount represent 64% of total expenses at approximately $36bn. What else they are going to reduce cost on? Technology and equipment? Occupancy? Those are less than $6bn.
The headcount will be the main source of savings, it will likely take a couple of years to achieve it through attrition, automation and layoffs. Non core activities will likely be sold as well. It's not all bad but it's going to happen. This was the plan pre-pandemic. Looks at BofA and JPC revenue, number of branches and headcount and you will have a very good idea where we are headed.
My statement was MORE deposits
The bank already has $1.7 Trillion on deposit, which is essentially at the FDIC cap.
Deposits act as a liability on the balance sheet, too many deposits and not enough assets put the balance sheet out of balance, Capital Management 101. WF not allowed to increase assets due to asset cap, therefore there is really no point in having a giant branch network to collect deposits. Those other functions will all be more centralized with more bots and AI, and fewer humans who create compliance and operational risk.
The banks absolutely needs deposits! Where do you think we get the money to loan out? There is the saver/borrower relationship at its most basic to understand.
In fact, in a digital world, branches are focused on driving quality traffic. Quality is not check deposits, account maintenance and the like. Every institution is figuring out that brick and mortars are less and less efficient. Take a look at VOC (voice of customer) when discussing a branch.
Also consider licensed professionals (Series 7, 24,etc) staff branches. They are educated, trained and continually educated on investments and relations with customers beyond account maintenance.
Every institution is closing up branches. The ROI is just not there any longer to justify.
Chase has been phasing out customer's going into a branch way before COVID. I walked into a Chase lobby to cash a check and get specific bills and there was someone standing there to greet me and told me to go deposit my check in the ATM and then take out the cash from the ATM. The tellers were hidden behind a wall. You can't use an actual teller unless you get permission from the gate keeper. It is where banking is headed and I don't like it, but then again I am one of the older ones who appreciate traditional banking.
I'm fascinated by how many on this board think having a massive branch network is a good idea. I'm a GENX'r (technologically deficient) and have been to a branch only once in the past 5 years. I've refinanced my home 2 times in the past 3 years and NEVER set foot in a branch. Virtually everything can be done electronically now. No need to have so many branches.
First, the bank doesn’t need more deposits customers. The bank needs to be able to lend out the money already on deposit in the form of credit cards, mortgages etc. The bank needs to rid itself of the asset cap to do that.
Bank of America has a branch network that’s about where WF is going to cut down to.
WF is more likely to lose customers given a total inability to keep itself from screwing up. For proof, see recent NBC reports on mortgage forbearance.
Labor related expense is $36B, they are going to at least $5B of the 10 from labor. That’s roughly 50000 FTE. They can probably save another $1B easy by releasing all contractors.
I live in San Francisco. I don’t own a car. I walk or take public transportation. I was a WF customer long before I became a TM, as a result of the merger with Crocker. 30-something years.
There used to be two WF branches and one BofA within walking distance of my home. One WF branch closed last year. If the other one closes I will switch to BofA.
For convenience. That’s it. That’s what I care about. I doubt if I’m alone.
In my urban neighborhood, I have a branch four blocks to the north of me, one three blocks to the East and one five blocks to the south. I’m willing to bet you could close 2 of the 3 and not lose a single customer. One of them sits on a piece of dirt that we own that is easily worth $10mm. We have a ridiculous amount of capital and expense tied up in redundant branches.
I use the Wells Fargo banking center that is literally 8 minutes up the street from where I live. To get cash from the ATM, cash checks, turn rolled coins into cash, etc. Now there is also a Bank of America
banking center directly across the street from the Wells Fargo banking center. When I was an employee of Bank of America I of course used the town Bank of America banking center. When I became a Wells Fargo employee I started using the Wells Fargo banking center. Now the town Wells Fargo banking center is closed, except for ATM and drive through service. If it completely shuts down the town residents still have the very convenient Bank of America banking center right across the street to do business with rather than driving an extra 15 minutes or so to the next town center to deal with the still open Wells Fargo banking center there. Just for an example of how customers can be lost by closing existing banking centers.
My college degree is in Psychology with minor in Computer Science. My hypothesis is that the more Wells Fargo banking centers the company closes the fewer customers it will have. Shall we do some statistical analysis on a comparison of current number of Wells Fargo customers versus the number of Wells Fargo customers after a huge number of banking center closures? Yes that should be done.
I predict a very negative outcome as the result of closing huge numbers of Wells Fargo banking centers when assessing the total number of new customers, retained customers and lost customers.
Wells Fargo doesn’t want the kind of customer who prefers to walk into a bank and talk to a person.
It’s all about millennials and moving people online.
When is the last time you saw marketing that didn’t show someone on the phone or a laptop?
I worked as a programmer at Bank of America in Marketing and also as a programmer at Wachovia/Wells Fargo in Marketing. I say having the presence of a banking center in town
is one of the most effective Marketing campaigns either bank can introduce. There it is,
with the huge sign "Bank of America", every time the town residents drive on by it. It says
"come in and bank with us", or at least think about "Bank of America". Then it is also so convenient to have the bank ATM right there to stop at on the drive home from work or shopping. So if Wells Fargo
closes lots of it's banking centers Bank of America will be getting all of the business around the now closed Wells Fargo banking centers.
I do not think that it is all that great of an idea to close lots of Wells Fargo banking center branches. When I do go to them, during the daytime operating hours, and on the weekend operating hours, there are LOTS of customers using the services provided by the tellers. Either inside the building or via the drive thru windows that are teller staffed. Customers want to use a bank where they do not have to drive 20 miles away to get to a banking center and interact with the banking staff. Banks like 5th/3rd where is there even a banking center not 30 miles away? I think it is a big mistake to close so many Wells Fargo banking centers and that a new marketing campaign would be to INCREASE the number of Wells Fargo banking centers. Many customers do not want to use just online banking and apps. They want to go in and speak to a banker in person for assistance. They will not do that if it becomes really inconvenient, driving 10-20 miles away from home to do so. Meanwhile Bank of America seems to have a banking center in very close proximity to many Wells Fargo banking centers. So the customers will switch to Bank of America instead as the banking center is right near by their home.
They don't use Six Sigma, quality control. Get to the root cause of problems. Figure out how to save money by doing things like not printing on paper unless essential, etc. Have employees make suggestions and participate in efforts to find ways to reduce costs. Agile won't save all that much money I don't think. The work of a project all still has to be done at some point. Agile just breaks it into smaller phases with smaller deliverables required at each step to get to the final end goal.
If they really want to save money they should just ask Moldofsky to show them how to take her “E &E” (Efficiency and Effectiveness for the uninitiated) initiatives company-wide.
After all, look how that worked out.
They need to bring back Project Compass! I mean we had ideas in our building that saved the company HUNDREDS of dollars a year!
Wow guys- be serious. If you would actually help think of non person el expenses and inefficiencies you just may save your job! They still need the majority of us to keep things going but of course there are areas that are dying- retail bank space has already been on the chopping block and even more so now that more has moved digital. There are still a lot of money wasted in the businesses. Think about it and offer suggestions to your leaders and stop just complaining.
Follow up: OCC lists 23 WF branches closing as of their 7/11/20 bulletin. Branches cost between $600k and $800k a year to run. Low end expense save there THIS year alone roughly $14 million. Many more branch closings to come.
Expenses will not be relegated to headcount. Please stop thinking that. Only serves to worry yourself. Branches are closing and not just because of COVID but because Wells has too many and we live in a digital world. Branches are a huge expense with people, leases, insurance, etc. check the OCC for these listings. Requirement is to notify customers are least 90 days before a branch closes. Building leases are being revisited as well. Charlotte just gave up one of its buildings. 3P spend is through the roof!
Please, for everyone, stop assuming it’s all headcount! While there will be reductions in people for sure, it’s not just that.
The 10bn reduction is not only personnel. It include 3P spend, which is astronomical. Stop pulling numbers out of your a$$
It keeps going up. I heard slightly north of 50k, not 75k. A lot of team members, and not the best time to be looking for a new job.