The community banking division of Wells Fargo, which handles retail banking, has generated weaker profits since September. The reason behind this is because in September, Wells Fargo signed a settlement deal for $185 million because employees had been opening unauthentic accounts for more than 5 years without customers’ permission. This week, the firm’s consumer operations revealed another scandal where the bank had charged as many as 500,000 customers for auto insurance they didn’t need.
As a remedial step, Wells Fargo announced on Friday that it is cutting 69 executive jobs at its retail unit, as part of a restructuring in the division.
“Some of the executives positions will retire with full benefits while others may find positions elsewhere within the bank,” said Wells Fargo spokesman Paul Gomez.
“We have just completed the process of consolidating the Regional President and Area President roles into a new position, Region Bank President,” said Mary Mack, senior executive vice president for community banking.
The unit will have 91 regional and area presidents as part of the restructuring. Most of the remaining managers will be re-titled as Regional Bank Presidents with direct responsibility for more employees than before.
“Change is hard, yet change is necessary to make sure we are well positioned for the future. In order to truly be better, we must put the right structure in place,” she added.
Amidst this scandal and the news of the massive job cuts, Wells Fargo shares fell 2.6% when the markets closed on Friday.