Wells Fargo & Co. is eliminating another 1,865 jobs across the country, including 332 in the Twin Cities, as the nation’s largest mortgage lender adjusts to the shifting landscape for home loans.
The San Francisco-based bank confirmed Wednesday that it was notifying employees in the Twin Cities and “various other cities” but declined to be specific. It also wouldn’t say which Twin Cities locations were affected.
Wells Fargo has more than 20,000 employees in Minnesota, and about 8,000 work in its mortgage operation that has offices around the Twin Cities, including a large campus in south Minneapolis.
“As always, we are committed to retaining as many team members as possible, and are working with them to identify other opportunities within Wells Fargo,” spokeswoman Peggy Gunn said.
Last month, Wells Fargo notified 161 people in the Twin Cities mortgage operation that their jobs would end within 60 days. That came after a cut of 34 jobs to its Minneapolis staff in July.
The latest round of cuts amounts to about 2.6 percent of the 70,000 people in Wells Fargo’s consumer lending business, which includes mortgages.
Wells Fargo, which makes nearly one in four U.S. home loans now, doesn’t break out the size of its mortgage workforce. It already had cut about 3,000 jobs since July as rising mortgage rates sapped demand for home loan refinancing.
Meanwhile, Gunn said the staffing trims do not affect the bank’s “continuing evaluation of the Ryan project.”
Wells Fargo has been in talks with developer Ryan Cos. to occupy about 1 million square feet of office space in the $400 million development Ryan is pursuing next to the planned Vikings stadium in Minneapolis. There’s been steady speculation that the bank will hang its shingle on the project’s two office towers, but Wells Fargo has not confirmed that.
Speaking at a conference hosted by Barclays Capital earlier this month, Wells Fargo chief financial officer Timothy Sloan lowered predictions for the bank’s third quarter mortgage originations by a third to about $80 billion. He said that it will take one to two quarters to adjust to the slower mortgage environment and that the recent interest rate increases won’t “snuff out the housing recovery” in any way.
Fannie Mae said last week it expects 30-year, fixed-rate mortgages to drift to about 5.3 percent by the end of 2014, up from just over 4.5 percent earlier this month.
The Fed, calming fears that a pullback in its purchases of agency mortgage-backed securities would drive mortgage rates higher, announced Wednesday that it won’t yet start tapering off the $85 billion a month in bond purchases it’s been making to stimulate the economy.
Guy Cecala, CEO and publisher of Inside Mortgage Finance, said Wells Fargo has a reputation for being particularly “elastic” when it comes to staffing its mortgage operations. Plus, he said, it’s a convenient time to downsize.
“There’s some speculation that rising rates and everything are an excuse for major banks to lay off and reduce the head count because they view staffing levels as still bloated five years after the credit crisis,” Cecala said. “I think it’s a mistake to assume or suggest that Wells Fargo, or any bank, is laying off staff to reduce their origination activity going forward.”
Announcing layoffs in a piecemeal fashion as Wells Fargo is doing, instead of broadcasting the overall reduction as JPMorgan Chase & Co. has done, is perhaps “more palatable and less damaging for morale,” he said.