Wells Fargo layoffs are hitting Iowa differently. The financial service company has announced 36 more layoffs from its Jordan Creek Parkway campus in West Des Moines, marking a continuation of the challenging period the bank has faced over recent years. This recent announcement was reported on Iowa's Worker Adjustment and Retraining Notification (WARN) website. This highlights a layoff trend that has been ongoing since 2018.
With these new layoffs, Wells Fargo's Iowa workforce has diminished by 1,356 positions through WARN notices, emphasizing the significant impact on local employment and the broader community.
GTN / Wells Fargo lays off 36 more employees, the announcement maintains the cycle that has been going on since 2018.
The Background of Wells Fargo's Workforce Reduction
The ongoing series of Wells Fargo layoffs are part of a broader strategic reorganization by the San Francisco-based banking giant. In late 2023, CEO Charlie Scharf indicated that the bank was bracing for nearly $1 billion in severance costs for the upcoming year. Thus, reflecting a substantial downsizing effort.
This initiative saw the company reduce its workforce by 11,300 jobs or 4.7% of its total workforce in 2023, according to reports. These cuts come in the wake of a tumultuous period for Wells Fargo, beginning with a fake accounts scandal in 2016 that significantly tarnished the bank's reputation and led to heightened scrutiny and record fines.
Wells Fargo's Journey in Scandal to Restructuring
Wells Fargo's journey through scandal increased regulatory scrutiny, and now workforce reductions have been marked by several pivotal moments. The fake accounts scandal of 2016 was a significant turning point, leading to a reevaluation of corporate practices and a shift in the bank's strategic direction.
Elle / Following the scandal, Wells Fargo faced a series of challenges, including accusations of further impropriety and a notable downturn in its mortgage business.
This has historically been a significant component of its operations in Des Moines.
In December, the bank sold its six-story building at 7001 Westown Parkway in West Des Moines, which once housed its mortgage division, signaling a significant shift in its operational footprint. Moreover, plans were announced to consolidate its workforce at the Jordan Creek campus, leaving only the legal department in the downtown area.
These moves underscore Wells Fargo's strategic pivot towards efficiency and cost reduction, including automation and real estate offloading, as noted by CFO Mike Santomassimo in a recent analyst call.
The Impact of Wells Fargo Layoffs on Des Moines and Beyond
Wells Fargo's significant presence in metro Des Moines has long been a cornerstone of the local economy, with the bank once being the largest employer in the area.
The News / At its peak in 2017, Wells Fargo had about 14,500 workers in the metro. A number that has since decreased to approximately 11,000.
However, this reduction has impacted not only those directly affected by the layoffs but also the broader economic landscape of Des Moines, as Hy-Vee has now surpassed Wells Fargo as the largest employer in the metro, with about 12,000 employees.
What This Means for Wells Fargo and Des Moines
The Wells Fargo layoffs are a reflection of the broader shifts within the financial services industry and highlight the challenges traditional banking institutions face in adapting to the rapidly changing economic and technological landscape. For Des Moines, the reduction in Wells Fargo's workforce poses questions about the future of employment and economic growth in the region, especially in the finance and insurance sectors that have been key drivers of the local economy.
As Wells Fargo continues to navigate its strategic restructuring, the impact of these layoffs will undoubtedly reverberate through the community, prompting a reevaluation of economic strategies and workforce development initiatives.