Of major U.S. banks, Wells Fargo has struggled the most with the impact of the coronavirus on the U.S. economy. Scharf, who started in October, was in the midst of planning a vast realignment of the bank when the virus hit. Before his arrival Wells Fargo had regularly lost ground in many of its lines of business to competitors JPMorgan Chase and Bank of America.
A growth cap imposed on the bank by the Federal Reserve as a result of its sales scandal didn't help, but Scharf has also criticized bloated expenses. He has considered reducing the size of the bank and exiting various lines of business. Much of that was temporarily sidelined when the pandemic hit.
In June, the bank's CFO, John Shrewsberry, said he expects jobs cuts to come this year. Wells Fargo employs vastly more people than its competitors, with a total headcount of 263,000. Bank of America, which is roughly similar in size, employs 208,000.
The bank employs 27,000 people in Charlotte, a result of its 2008 purchase of Wachovia. Wells Fargo also has the largest branch network of any American bank.
With the recent drop in profits, cutting costs becomes paramount if the bank is to return to profitability.
Early Tuesday, JPMorgan reported earnings that beat Wall Street's expectations, driven by strong trading revenues that offset the $10.5 billion it set aside to prepare for coming defaults. Charlotte-based Bank of America and Truist report earnings Thursday.
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