Wells Fargo lays off 80 more workers from downtown Des Moines offices
- Layoffs at Wells Fargo continue, with another 80 downtown Des Moines workers let go from July 11 to Aug. 8.
- During 2022 and this year, the company has laid off more than 550 employees amid a downturn in its home mortgage business
- It's also paid billions in settlements and penalties stemming from a 2017 fake accounts scandal
In what it is calling “an adjustment of staffing levels to align with market conditions and its business needs,” Wells Fargo has notified Iowa Workforce Development of 80 downtown Des Moines layoffs.
That brings to more than 550 the total of workers the Des Moines metro's largest employer has laid off this year and last as its locally based home mortgage division has seen a downturn driven by higher interest rates. It announced in January it would close its correspondent business, which buys mortgages from other lenders.
According to the state' Worker Adjustment and Retraining Notification Act website, the layoffs in Des Moines occurred between July 11 and Aug. 8, with 65 occurring at the company's 800 Walnut St. location, eight at 206 Eight St. and seven at 801 Walnut St.
Wells Fargo is currently in the process of moving most of its downtown employees to its West Des Moines campus on South Jordan Creek Parkway. A company spokesperson has not said how many workers are leaving downtown or how many will remain. But the company has said it will seek to sell the 800 Walnut and 206 Eighth St. buildings while maintaining legal department offices at 801 Walnut. The 800 Walnut building alone was designed to accommodate 1,100 workers.
Wells Fargo cuts add to others in April and last year
The company announced the layoff of 78 employees from its downtown offices in April and an additional 25 in May from its Jordan Creek facility. It cut 398 jobs in the Des Moines metro in 2022, according to the company's filings with Iowa Workforce Development. Before that, the company had not announced local cuts since June 2019.
“We work very hard to identify opportunities for employees in other parts of the company so we can retain as many employees as possible,” Wells Fargo spokesman Mike Slusark said Monday. “Where it is not possible (to relocate employees), we provide assistance such as severance and career counseling.”
Home lending down 13% in latest quarterly report
The San Francisco-based company's second-quarter report, released last month, showed earnings from home lending had fallen to $847 million from $972 million in the same period a year earlier, a total of $125 million.
"Home Lending was down 13% on lower net interest income due to loan spread compression and a decline in mortgage banking income driven by lower originations," the report said.
Another potential drag on the company's earnings is a $1 billion settlement it agreed in May to pay to settle a class action lawsuit that accused it of harming investors by overstating how much progress it had made fixing up its practices in the aftermath of a fake accounts scandal that rocked it in 2017. That settlement followed $3.7 billion in fines and compensation it agreed in December to pay in connection with that case.
The company's stock in March 2022 bottomed out at $36.23 a share, down nearly 38% from its January high of $58.31. It was trading at $43.58 Monday afternoon.
Overall, however, Wells Fargo's revenue for the second quarter of 2023 was up about $3.5 billion from a year earlier to a total of $20.5 billion.
Kevin Baskins covers jobs and the economy at the Des Moines Register. Reach him firstname.lastname@example.org.