Wells Fargo to cut 3,800 jobs

Wells Fargo & Co. on Wednesday announced plans to restructure its Wells Fargo Financial subsidiary, eliminating 3,800 jobs and closing all 638 of its locations including offices in Cedar Rapids, Coralville, Dubuque and Waterloo.

The number of people employed by the four Eastern Iowa Wells Fargo Financial locations is not known.

Wells Fargo said 2,800 of the 14,000 positions at Wells Fargo Financial will be eliminated during the next 60 days, and 1,000 positions will likely be eliminated during the next 12 months.

The San Francisco-based financial services company said the remainder of the team members will be reassigned to other Wells Fargo businesses.

Wells Fargo said the restructuring of Wells Fargo Financial means it will no longer originate non-prime portfolio real estate loans.

FHA home loans, auto loans and credit cards previously offered by Wells Fargo Financial will be consolidated with similar products across the company and will be offered through its network of community banking stores, mortgage stores, phone banks and wellsfargo.com.

Wells Fargo Financial customers with existing consumer loans and clients of the unit's commercial businesses will continue to be served without disruption. Less than 2 percent of all Wells Fargo's real estate loans were originated in Wells Fargo Financial stores in the first quarter of 2010.

Wells Fargo said the 2008 merger with Wachovia expanded customer access to the company's 6,600 Wells Fargo and Wachovia community bank stores and its 2,200 Wells Fargo Home Mortgage locations, eliminating the need for a separate network of Wells Fargo Financial local offices.

“The economics of a separate Wells Fargo Financial channel are no longer viable,” said David Kvamme, president of Wells Fargo Financial. “We know that this decision will be extremely difficult for those dedicated team members and their families who will be affected.”

Kvamme said the company has already identified positions for thousands of Wells Fargo Financial employees and is committed to finding new positions for as many affected team members as possible.