Wells Fargo & Co. is cutting 638 mortgage employees, including 190 in California, 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.
Goyda said the affected California jobs are in Rancho Cordova, east of Sacramento. The company is also cutting jobs in Colorado, Florida and North Carolina.
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. In May, Chief Executive Tim Sloan warned investors of “overcapacity” in home loans.
The San Francisco 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 Oct. 21, the bank said.