Wells Fargo & Co. (WFC), the lender looking to trim more than $1.7 billion in quarterly expenses by the end of this year, may move some jobs overseas.
Roles in technology, the retirement division and other business lines could shift to India and the Philippines as part of a companywide review, Bridget Braxton, a spokeswoman for the San Francisco-based bank, said yesterday. News 14 Carolina reported a review for the retirement business earlier, citing an internal memo from a Wells Fargo executive it didn’t name.
Wells Fargo announced plans in 2011 to cut expenses by $1.5 billion a quarter to about $11 billion at the end of 2012. Costs rose in the first three months of the year to $13 billion, and Chief Executive Officer John Stumpf said expenses may hit the high end of the range, or $11.3 billion.
“We are absolutely committed, but if we get to the fourth quarter and if, for whatever reason, there is all kinds of revenue available in a certain business -- or a number of businesses -- we’re not going to be slavish to any one number,” Stumpf said April 13 in response to an analyst’s question.
Braxton, who declined to make the memo available, said it alerted employees that the bank was undergoing “an assessment” of the idea. She wouldn’t say how many jobs may be moved.
The bank had 264,900 full-time employees at the end of March. Stumpf said on Jan. 17 that 98 percent of the workforce is in the U.S. The lender employs 3,000 people in India and another 240 in the Philippines, Braxton said.
Wells Fargo said that it planned a “streamlining” of some operations, including “where possible, locating functions in the most cost-effective locations,” according to a July 19 presentation. That may mean moving some functions to different locations in the U.S. as well as abroad, Braxton said.
“Our customers are international, demand round-the-clock service and expect faster turnaround for decisions and responses,” Braxton said in an e-mailed statement. “Global expansion of our workforce allows us to do these processes faster, with more flexibility.”
Wells Fargo has had employees in India since 2006 when it opened a so-called technology resource center in Hyderabad. The bank cited a “growing need” for talent that couldn’t be met by U.S. workers, according to an August 2006 statement. The move wasn’t made to cut costs, Wells Fargo said at the time.
The company started a Philippines-based unit in November, Braxton said. Many jobs in the Philippines are “customer- service” roles, while those in India involve technology functions as well as functions for many business lines across the bank, she said.
Overseas jobs “offer the opportunity to use Wells Fargo- owned and operated offshore capabilities at significantly reduced costs, while at the same time leveraging our existing technology infrastructure and security standards,” the bank said in the retirement-division memo, according to News 14.
To contact the reporter on this story: Dakin Campbell in San Francisco at firstname.lastname@example.org