Wells Fargo CEO Charlie Scharf said Tuesday that low staff turnover means the company will likely book a large severance expense in the fourth quarter.
“We’re looking at something like $750 million to a little less than a billion dollars of severance in the fourth quarter that we weren’t anticipating, just because we want to continue to focus on efficiency,” Scharf told investors during a Goldman Sachs conference.
The company needs to get “more aggressive” on managing headcount because employee attrition has slowed this year, Scharf said. While the bank has made progress under his tenure, Wells Fargo is “not even close” to where it should be in terms of efficiency, he added.
That expense is an accrual for worker layoffs that Wells Fargo expects to make next year, according to a spokeswoman for the bank. Wells Fargo had 227,363 employees as of September.
Under previous leadership, employees had fanned out across the country. Now, Scharf wants them near one of the bank’s office hubs. Some workers will be offered paid relocations, while others will only be offered severance. Workers who don’t opt to move may lose their roles, according to a person with knowledge of the situation.
This story is developing. Please check back for updates.
Read the full article here