Continuing with its retrenchment efforts, Wells Fargo WFC will now slash around 202 jobs in the bank’s consumer banking business payroll services, per a filing with the state. The latest development comes after the bank announced that will outsource its consumer banking business payroll services to HR and payroll company, ADP. These layoffs will be in its Bloomington office, per Minnesota's Department of Employment and Economic Development.
The retrenchment, beginning May 24, will be completed by the first quarter of 2020. Moreover, currently there is no information whether or not the employees have any “bumping” rights. Furthermore, the laid-off employees will be granted severance and permit to be on the bank’s health plan temporarily.
Notably, these employees are allowed to apply for other positions within the bank as per their qualifications, else it will help secure new jobs.
Reasons of Retrenchment
In sync with its restructuring moves, Wells Fargo has entered into an agreement with HR and payroll company — ADP — in order to transition the bank’s payroll clients on closure of the Business Payroll Services department. Per the deal, existing or future client inquiries regarding Wells Fargo payroll services will be directly catered by ADP. However, the acquiring company will not take over any of Wells Fargo's payroll employees.
"The agreement does not include the transfer of any Wells Fargo team members to ADP," a Wells Fargo spokesman stated in an email. “The relationship with ADP helps us meet our goal of ensuring the business needs of these customers are met to the fullest extent possible," the mail further mentioned.
Wells Fargo’s sales scam allegation has led to many setbacks, including the banking giant’s tainted image, numerous lawsuits, triggered federal and state investigations, and congressional hearings. Moreover, the bank was unable to maintain profitability as compared to the set targets.
The bank aims to control costs through consolidating its operations, processes’ improvement through technology and mechanization, as well as the outsourcing of certain operations.
Currently, Wells Fargo carries a Zacks Rank #3 (Hold). Shares of the company have gained around 6.5% in the last three months.
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Webster Financial Corporation WBS has been witnessing upward estimate revisions for the past 60 days. Further, the stock has appreciated more than 3% in the past three months. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
M&T Bank Corporation MTB has been witnessing upward estimate revisions for the past 60 days, with the company’s shares rising nearly 10%, in three months’ time. It holds a Zacks Rank of 2, at present.
E*TRADE Financial Corporation ETFC has been witnessing upward estimate revisions for the past 60 days. Over the past three months, this Zacks #2 Ranked company’s shares have been up more than 3%.
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