By Lananh Nguyen and Nivedita Balu NEW YORK/TORONTO (Reuters) -Wells Fargo CEO Charlie Scharf said on Wednesday he expects the U.S. bank’s workforce to decline further as it focuses on efficiency. “It’s likely we’ll have less headcount as we look forward … we’d like to do much of it through attrition as possible,” Scharf said […]
Business
Wells Fargo CEO expects bank’s workforce to shrink further
Audio By Carbonatix
By Lananh Nguyen and Nivedita Balu
NEW YORK/TORONTO (Reuters) -Wells Fargo CEO Charlie Scharf said on Wednesday he expects the U.S. bank’s workforce to decline further as it focuses on efficiency.
“It’s likely we’ll have less headcount as we look forward … we’d like to do much of it through attrition as possible,” Scharf said in an interview, noting the bank had 275,000 employees when he joined in 2019 and a little over 210,000 currently.
The U.S. Federal Reserve removed a $1.95 trillion asset cap on Wells Fargo in June, removing a major penalty for the bank’s fake-accounts scandal and opening the door to growth. At the same time, the bank is focused on becoming more efficient and cutting expenses.
“Headcount is the outcome of the conversations that we have about ‘we’re way too inefficient, we’re way too bureaucratic, we have way too many processes inside the company that don’t add value,'” Scharf said.
AI TO DRIVE SOME JOB CUTS
Artificial intelligence could also drive some workforce reductions.
“The opportunities that exist in AI are very significant, and anyone who sits here today and says that they don’t think they’ll have less headcount because of AI either doesn’t know what they’re talking about or is just not being totally honest about it,” he said.
After regulators lifted the seven-year asset cap, the fourth-largest U.S. lender has more freedom to expand through acquisitions.
“We don’t feel the pressure to do any M&A whatsoever … We have amazing opportunities in every one of our businesses, we have scale in everything that we do,” he said.
Still, Wells Fargo could be interested in buying another lender at “at the right price” in appealing geographies, he said, without naming the areas. Payments and wealth management are other areas in which the bank could add capacity, he said.
Scharf noted the bank’s assets exceed $2 trillion, after the cap was lifted.
“We now can grow our checking accounts, we can grow deposits alongside that, we can grow the rest of our lending products … literally every one of the businesses we have plans to grow utilize the balance sheet,” he said.
The bank’s stock jumped in October after its profit beat expectations and it lifted its target for return on tangible common equity to 17% to 18% over the medium term, compared with earlier expectations of 15%.
Scharf has previously said he aims for Wells Fargo to become the top U.S. consumer and small business bank and wealth manager, as well as a top-five U.S. investment bank.
Analysts and investors expect Wells Fargo to move swiftly on its expansion plans under Scharf, who took charge in 2019, months after the bank’s fake-accounts scandal drew public outrage and billions of dollars in fines.
“We think (our future) is going to be extremely bright, with or without something that’s inorganic,” he said.
(Reporting by Lananh Nguyen in New York, Nivedita Balu in Toronto and Pritam Biswas in Bengaluru; Editing by Rod Nickel)