Wells Fargo starts cost-cutting layoffs amid COVID-19 blight

Wells Fargo, the scandal-plagued bank that hired a new CEO last year, has begun anticipated layoffs amid a COVID-19 economic swoon that has chilled the once-thriving U.S. labor market.

The bank initially paused what it calls "new job displacements" in March as the pandemic shut down swaths of U.S. businesses, but it resumed them in August without specifying how many positions would be cut.

"We expect to reduce the size of our workforce through a combination of attrition, the elimination of open roles, and job displacements," Wells Fargo spokeswoman Beth Richek told FOX Business. "We are executing this work in a thoughtful and deliberate manner, and we will communicate openly and honestly with impacted employees."

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By trimming its workforce, Wells Fargo says it will bring its expenses "more in line with our peers and create a company that is more nimble, streamlined, and customer-focused."

CEO Charlie Scharf had promised significant cost cuts in July after the bank reported its first quarterly loss since 2008, noting that the company was far less efficient than its competitors.

The San Francisco-based lender, which has replaced two CEOs in the past four years while grappling with scandals from the creation of millions of fake accounts to improper fees charged to mortgage and auto-loan customers, said it will provide severance and career assistance to affected employees, who are losing their positions during the worst economic downturn since the World War II era.

Nationwide, more than a million workers lost jobs last week alone, bringing the total number of people seeking unemployment benefits to roughly 14.8 million.

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Bloomberg reported in July that the bank would cut tens of thousands of positions later this year to reduce costs.

The Associated Press contributed to this report. 

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