Now that there is not a lot of doubt that some sort of recession is going to impact the US economy, one has to wonder how it will impact WF, especially given the fact that thing are not great as it is.
I imagine that older employees with large wages are going to be the first in line to be eliminated. However I wonder if there are any positions that will be in more danger than others, or is there a certain tier of management that could suffer the most if larger cuts due to recession occur?
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Rates are still historically low. Problem is that young people have never seen 7%, which is still really a good rate. And the rates WILL go higher. My guestimate (having seen this before) is that we'll top out around 13% on a 30 year. Still not too terribly bad from a historical perspective.
But THAT drives a second problem: Investor Sentiment. That drives the market big time.
Advice to young people who are worried: invest every nickle that you can into your 401k, because you're taking advantage of equities being "on sale" right now. That's going to pay off big time for you 10 or 15 years down the road.
Mortgage will get out of originations and only keep the servicing business. 40 to 45% reduction of staff. Close either the West Des Moines or Minneapolis campus. Probably Minneapolis as it will be easier to sell than the Jordan Creek facility.
Tech will have its budget slashed
How do banks make money? From companies and private customers. And if these two are severely affected by the economic crash, of course banks suffer as well. And there you have it, the eventual effect is more layoff in the bank. We are all tied up in the web of economic woes, one ecosystem.
I’m more worried about the affect of inflation and the asset cap. We are required to stay below the $1.95 trillion cap, but from 2018 until now, inflation is up roughly 16%. So, due to inflation, the same $1.95 trillion number is, today, more like roughly $1.67 trillion in 2018 dollars. Maybe this is a backwards way of explaining it, but in essence, the asset cap keeps getting lower and lower (tighter and tighter) measured in the power of that same dollar amount. The biggest issue is that asset cap!
Look for analysis to begin shortly on 2023 plans. Anything that isn’t truly urgent will be put on backburner. Managers will have to start defending budgets and projects. If no signs indicating turnaround soon, expect those discussions to heat up in the next month (they’re already starting at higher levels).
@itz+1he7d9b8 Good thought, but in reality, it has been a cost-cutting practice for decades. A long-run cost cutter. Stocks go up immediately when those types of moves are announced. But as it has been said in other postings, Charlie's attrition strategies have been working to a small extent and those are the least expensive for Wells. Keep your resume up to date.
Charlie Company stays put. Next question please.
I know a quick way to cut $25 Million in salary.
During the 80's mortgage rates were in the teens. I think the initial shock of the jump in interest rates will recede over the next 6 - 12 months, as people will still need to buy houses and move. However, the interest rates will greatly increase their payments over what they could have afforded 6 months ago. Home prices are not coming down. Believe it or not, there is a shortage in the US. Raw materials are still expensive, driving up the cost of new builds. As new home demand drops due to costs, the current inventory should stabilize in pricing. If (and it's a big IF) inflation can be held in check and wages are adjusted, things will begin to settle out. However, right now it's a house of cards. If inflation continues to go unchecked (driven by increased energy costs and labor), it will get real ugly. Homelessness unlike anything we've seen before.
When the stock market was artificially inflated for four years to make their boy look good, what did you think would happen?
Of course, Wall Street has nothing to do with Main Street who has been suffering much longer due to elitist policies to allow corporations to pay zero tax and rich folks to get a tax break they don’t need.
Pathetic.
Auto Finance and Mortgage would be the most immediately impacted by rising interest rates an supply chain issues. New vehicle inventories are already down 40% nationwide. You can’t lend if there’s no steady stream of collateral. Additionally, increased mortgage rates are already pricing first time homebuyers out of the market. I’d streamline both business units to focus on servicing existing loans Since origination and growing the portfolio will be on the back burner for the foreseeable future.
Older employees might cause the company more money to layoff (severance).....just a theory
We are recession proof.
LOL
The recession started in late 2019, slowly.
Also, this is a layoff website, the OP isn't entirely off topic, but getting economic advice from a bunch of internet rando's may not be prudent.