Wells Fargo Lays Off Hundreds

Wells Fargo continued to dismantle its mortgage origination business this week, laying off hundreds of mortgage bankers across the country.

The bank declined to discuss details of the layoffs, and referred to the statement included in its fourth-quarter earnings report released in January that outlined plans to exit its correspondent lending business and reduce the size of its mortgage servicing portfolio.

“These plans continue the work the company has advanced over the past three years to simplify this business,” the bank said at the time.

A company spokesman said this week's cuts are part of the bank's efforts "to create a more focused home lending business."

Wells Fargo reported fourth-quarter net income of $2.9 billion, or 67 cents per diluted share, half of what it reported a year earlier when it earned $5.75 billion, or $1.38 per diluted share.

It attributed the dramatic decline to a steep drop in mortgage originations, which fell 57.4% to $786 million in the fourth quarter from $1.84 billion a year earlier. 

The bank began laying off staff from its Home Lending business in April 2022, after reporting the largest drop in quarterly net income it had seen since 2003. It laid off additional staff from the unit in July.

It reported a charge of $353 million, or 7 cents per diluted share, for severance expenses, primarily in home lending for the fourth quarter.

According to Bankrate.com, Wells Fargo is now the fourth-largest U.S. bank by assets, behind JPMorgan Chase, Bank of America, and Citigroup.