Wells Fargo said Thursday it will eliminate a layer of top management across its community banking unit, a move expected to result in layoffs.
Charlotte-based community banking head Mary Mack told employees in a memo Thursday the company is consolidating its regional president and area president roles into a new position – region bank president. The move reduces 160 executive positions to 90, Wells Fargo spokeswoman Bridget Braxton told the Observer.
“So, there will be displacements,” Braxton said.
It’s the latest change affecting community banking leadership at San Francisco-based Wells Fargo, which has been reeling since September from a sales scandal involving unauthorized customer accounts. Last week, The Wall Street Journal reported on a memo detailing rearrangements of executive positions in the western U.S. region, a hotbed for the bad sales practices.
Mack, who in July took over the community banking unit at the center of the scandal, said in her memo that the consolidation will create one clearly defined role that, among other things, reduces levels of management and tightens controls. Under the new structure, approximately six to eight district managers will report to each region bank president, according to the memo.
“We truly believe this is the right go-forward structure for Community Banking as this change will allow us to be more streamlined, efficient, and consistent across our markets,” Mack said.
Braxton, the spokeswoman, said it remains unclear who will be named to the new region bank president roles, as region presidents and area presidents will both be eligible. Mack, in her memo, said the bank will use a structured interview process to select region bank presidents, with final decisions expected to be announced in late July.
“I recognize this is a difficult change for us all, and that it may impact support partners as well,” Mack said. “I appreciate in advance your understanding and respect for the process and the outcomes.”
The moves add to changes Wells Fargo has made elsewhere in its retail bank following the scandal, which cost the former CEO his job, led to $185 million in fines and sparked government probes. The bank has fired some community banking executives, eliminated sales goals for retail bankers and separated its chairman and CEO roles, among other steps.
Last month, the bank disclosed plans to chop $2 billion in costs to boost the bank’s bottom line, at a time when the scandal is costing Wells Fargo business.
Those cuts followed plans Wells announced in January to reduce annual expenses by about $2 billion by the end of 2018, with those savings plowed back into customer service, risk management, cyber security and other initiatives.
Deon Roberts: 704-358-5248, @DeonERoberts