In the latest downsizing move by a big bank, Wells Fargo has started cutting jobs this week in its securities unit, including positions in Charlotte, sources familiar with the situation said.
The displaced employees include managing directors – high-level jobs that can draw seven figures in compensation, the sources said.
The Wells Fargo unit has become the biggest source of high-paying investment banking jobs in Charlotte, as Bank of America has shifted much of that activity to New York.
Wells spokeswoman Elise Wilkinson said the bank was cutting a “small number” of jobs in its securities unit but did not disclose a specific number.
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“As part of the normal course of business, we periodically adjust our staffing levels,” Wilkinson said Wednesday. “We remain fully committed to growing our investment banking business. Staffing levels were up across the Wells Fargo Securities business in 2015 and we expect continued growth in 2016.”
Wells Fargo Securities, which employs about 5,000 worldwide, offers Wall Street-style services to corporate clients, including merger advice and stock and bond offerings. Investment banks are known for cutting staff regularly, and turbulent financial markets have made the business more challenging entering 2016.
Big banks are under pressure to cut costs amid low interest rates and a decline in trading revenues. Bank of America CEO Brian Moynihan, for example, has said the Charlotte bank expects to reduce its employee count further this year, and British bank Barclays plans to cut 1,200 jobs worldwide, Bloomberg reported on Wednesday.
Separately, Wells Fargo on Wednesday said it was shedding 68 mortgage positions in Charlotte and Fort Mill, as part of 581 layoffs nationwide. Wells and other banks have been trimming mortgage staffs which they had bulked up during the financial crisis to handle problem loans.
Wells Fargo Securities grew considerably in 2008 when San Francisco-based Wells bought Charlotte-based Wachovia, which had a larger investment banking and capital markets operation. The unit has its largest employee hub in Charlotte, with about 2,400 workers, and trading floors in uptown’s Duke Energy Center.
Wells Fargo Securities is led by Jonathan Weiss, a former Wachovia executive based in New York. Rob Engel, a former Wachovia executive based in Charlotte, leads the investment banking and capital markets unit within the division.
The third-largest U.S. bank by assets doesn’t break out earnings for its securities unit. But it is part of the wholesale banking segment that made $2.1 billion in the fourth quarter of 2015, flat from a year earlier.
The bank does disclose quarterly income from investment banking fees, which fell 26 percent to $385 million in the fourth quarter from a year ago. For all of 2015, investment banking fees dropped 4 percent to $1.64 billion.
Compared to big Wall Street banks, Wells Fargo is a much smaller player. In 2015, Wells Fargo was 10th worldwide in the underwriting of stock and debt offerings, with 3.3 percent market share, according to Thomson Reuters. That was up from 11th place in 2014.
In mergers and acquisitions, Wells was 24th in completed deals worldwide, down from 21st a year earlier, according to Thomson Reuters.
Overall, Wells Fargo had 264,700 total employees at year’s end, down 500 from the end of September. In the Charlotte area, it has more than 23,000 workers.
The bank has been trimming in certain parts of the company, even as it plans to take on new workers through its purchase of General Electric finance units. Last month, Wells said it’s eliminating 121 technology jobs nationwide, including 39 in Charlotte, as part of an efficiency initiative.