Wells Fargo Chief Executive Officer Tim Sloan is cutting jobs with the hope that he can save his own.
Ever since taking over as CEO almost two years ago, Sloan has given top priority to move the bank past the fake-accounts scandal that garnered national headlines in 2016.
Under Sloan, the bank has overhauled managers and its board, launched apologetic ad campaigns and revamped sales practices. But the U.S. bank with the most employees has, until now, resisted deep job cuts, keeping its headcount at about 265,000.
That changed Thursday, when Sloan informed employees that up to 10 percent of positions — as many as 26,500 — would be eliminated over the next three years. In a town hall message broadcast to workers across the country, Sloan explained that Americans' adoption of digital banking and the firm's efficiency programs would result in layoffs and attrition.
"The message was, we're trying to meet customer needs better by cutting staff by 10 percent, which is laughable," said Charles Peabody, an analyst at Portales Partners. "They're cutting expenses because they've got a revenue problem, not to meet their customers' needs better."
Wells Fargo, the nation's third largest bank by assets, is struggling under the costs and business impact of its ongoing sales practice scandals. In September 2016, the bank said it was firing more than 5,000 employees it blamed for creating fake accounts under a high-pressure sales culture. But after disclosing that the bank opened millions of unauthorized bank and credit card accounts, other abuses were revealed, from bogus charges on pet insurance to the improper handling of wealth management and commercial clients.