Wells Fargo & Co. is cutting 638 mortgage employees as the nation’s largest home lender contends with a slowdown in the business.
“After carefully evaluating market conditions and consumer needs, we are reducing to better align with current volumes,” Wells Fargo spokesman Tom Goyda said in an emailed statement.
As interest rates rise, Wells Fargo is contending with the end of a refinancing boom that helped push profits to a record. In the second quarter, mortgage fees declined by a third to the lowest in more than five years. Chief Executive Officer Tim Sloan warned investors of “overcapacity” in home loans at a May conference.
The company is cutting in states including California, Florida, North Carolina and Colorado. The Orlando Sentinel reported earlier on the decision.
The San Francisco-based bank is also navigating under a punitive growth ban from the Federal Reserve. Expense reductions to the tune of $4 billion by the end of next year and a shift to higher-yielding products such as credit cards are part of Wells Fargo’s strategy to boost profitability while growth is restricted.
The affected employees were notified of the cuts Thursday and will receive pay and benefits through October 21, the bank said.
The bank doesn’t detail how many employees it has in its mortgage business. Companywide, it had a workforce of 264,500 at the end of June, making it one of the largest U.S. employers.