Wells Fargo laid off more than 500 mortgage bankers in a round of job cuts announced Tuesday, CNBC and Bloomberg reported, citing people with knowledge of the situation.
“We announced in January strategic plans to create a more focused home-lending business,” a bank spokesperson told both outlets. “As part of these efforts, we have made displacements across our home-lending business in alignment with this strategy and in response to significant decreases in mortgage volume.”
Some top producers were cut, including a few bankers who exceeded $100 million in loan volume last year and attended a company-sponsored sales conference this month in Palm Desert, California, sources told CNBC.
Wells Fargo cut bankers who operated in areas outside of the bank’s branch footprint, one source told CNBC. Those bankers don’t mesh with Wells’ renewed emphasis on existing customers, the source said.
Wells wouldn’t be the only bank to cut outliers to its brick-and-mortar presence. New York Community Bank last month said it would close 69% of recent acquisition Flagstar’s retail home-lending offices and shift to a branch-only model for that sector.
The home-lending segment, industrywide, has been frequently tapped for layoffs as banks look to maximize profitability. JPMorgan Chase cut hundreds of employees in its mortgage unit this month, including some managers. USAA, meanwhile, is cutting 130 home-lending jobs. Los Angeles-based PacWest said last week it is cutting 200 mortgage jobs at subsidiary Civic Financial and offering fewer loan products.
Wells Fargo has initiated several rounds of cuts in home lending since April. The bank’s workforce in total shrunk by nearly 11,000 employees in 2022, CNBC reported.
Wells Fargo saw a 70% drop in mortgage volumes during last year’s fourth quarter as consumer demand continued to swoon amid a series of interest rate increases, it said.
The bank’s pivot toward existing customers and nonwhite communities is “largely done,” CFO Mike Santomassimo said last week, according to Bloomberg.
Wells Fargo has communicated with affected employees, provided severance and career guidance, and tried to retain as many workers as possible, a spokesperson for the bank told CNBC. The bank will continue to serve customers “in any market in the United States” through its centralized sales channel, she added.
Many of the cuts affected bankers across the Midwest and East Coast, one of CNBC’s sources said. That includes mortgage bankers and home loan consultants, who are compensated mostly on sales volume, the network reported.