While specific numbers are yet to be revealed, it is reported that Wells Fargo has laid off employees in the mortgage-lending business. However, the displaced employees are being given adequate support in terms of counselling and severance package. The Bank will also try and retain as many employees as possible within the organisation, by helping them take up other suitable roles.
A week ago, the Bank had reported a drastic fall in net income. With interest rates soaring, the Bank’s mortgage origination business has been deeply impacted. Never before has Wells Fargo witnessed such a drastic decline in net income ever since its establishment about two decades ago.
Employees working for the processing, underwriting, and credit administration teams were told that that the reason for the layoffs was the changes in the mortgage market.
Going by posts on social media, employees have been displaced in Iowa, North Carolina, Phoenix, Minneapolis among other locations. .
Charlie Scharf, CEO, Wells Fargo, has been resorting to various measures to reduce expenses and re-examine the Bank’s business model for the past two years. Efforts have been underway to do away with units that are non-core.
The mortgage industry, in general, has been witnessing a slump due to rising interest rates and falling origination volumes and decline in mortgage financing.
Recently, Blend Labs, a digital lending platform also revealed its intention to lay off about 200 employees, that is, about 10 per cent of its workforce.