Wells Fargo announced Thursday that it plans to lower its headcount by 5 percent to 10 percent over the next three years, resulting in the loss of between 13,250 and 26,500 jobs.
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The bank has been undergoing a transformation in recent years as customer preferences have changed to more digital self-service banking, not to mention that the world’s third-largest bank has also found itself engulfed in multiple scandals over the last two years.
In 2016, it made headlines as branch employees were caught opening millions of fake accounts in customers’ names without their knowledge to meet sales targets. Other abuses then followed for the troubled bank from bogus charges on pet insurance to the improper handling of wealth management and commercial client accounts.
However, the company’s CEO, Tim Sloan, released a statement on Thursday citing the key driver for the layoffs as the "adoption of digital self-service capabilities.”
"We are continuing to transform Wells Fargo to deliver what customers want -- including innovative, customer-friendly products and services -- and evolving our business model to meet those needs in a more streamlined and efficient manner," Sloan said in a press release.
The news comes hours after the bank denied reports that it had approached former Goldman Sachs executive and White House economic advisor Gary Cohn about potentially replacing Sloan as CEO.
"Rumors that Wells Fargo's board of directors reached out to potential CEO candidates are completely false," Betsy Duke, chair of the lender's board of directors, said in a statement. "CEO Tim Sloan has the unanimous support of the board, and this support has never wavered. In his two years as CEO, Tim has driven significant transformational change at Wells Fargo, which is benefiting all stakeholders."
Shares had little reaction to the news and were up 0.5 percent Thursday.