Wells Fargo CEO Charlie Scharf stated that the company will likely face a significant severance expense in the fourth quarter due to low staff turnover. The expense is intended to increase efficiency and is an accrual for expected layoffs next year. While the bank did not disclose the number of jobs that will be cut, Scharf mentioned the need to manage headcount more aggressively due to a slowdown in employee attrition.
This move comes as Wall Street leaders express concerns about bloated payrolls amidst rising funding costs and a slump in Wall Street deals. Previously, Wells Fargo had already laid off around 11,300 employees in 2023. Despite the cautionary actions, Scharf remains optimistic about the economy, stating a potential “soft landing” for the US economy in the coming year.