On Thursday, April 7, Wells Fargo & Co. said that it gave 60 days notice on March 23 to 1,900 of its employees, informing them that they were being laid off. The majority of the employees processed mortgage applications. Home lending has slowed down in recent months, which is the reason for the recent layoffs.
The reduction in employees makes up less than 1 percent of Wells Fargo’s workforce and 3 percent of its mortgage employees.
According to a Bloomberg phone interview with Jason Menke, a spokesman for Wells Fargo, “The mortgage business is incredibly cyclical and we have to scale our operations according to customer demand.” These employees “were brought in for short-term assignments when they were hired. They were told that at some point these roles would end.”
Wells Fargo is the largest home lender in the U.S., and its mortgage applications that were pending went from $101 billion in the third quarter of 2010 to $73 billion at the end of the same year, according to the bank.
According to Menke, the layoffs are happening across the United States, and some of the people laid off will be reassigned to different positions in the company.