Wells Fargo Plans to Cut 700 Jobs as Mortgage Demand FadesElizabeth Dexheimer
Wells Fargo & Co., the biggest U.S. home lender, plans to eliminate 700 more jobs from its mortgage business as demand for buying and refinancing property slows.
The reductions are on top of 250 cuts made in January and more are possible in the coming months, Tom Goyda, a spokesman for the San Francisco-based company, said today. The bank sent notices yesterday to the affected employees, whose work includes mortgage origination, processing and fulfillment, Goyda said.
“We’ll continue to monitor the market and make adjustments to our capacity as is appropriate,” Goyda said. “We saw some significant declines in mortgage originations in the last half of 2013 and we expect to see a continued decline at this point in the first quarter.”
Wells Fargo’s retreat adds to evidence that the mortgage market hasn’t hit bottom. JPMorgan Chase & Co., the second-biggest home lender, told investors earlier this week it’s cutting jobs and expects a pretax loss this year from producing mortgages, which Chief Executive Officer Jamie Dimon called “the most painful business ever.”
Mortgage-banking income at Wells Fargo fell by almost half in the fourth quarter from year-earlier levels to $1.57 billion, and key gauges point to more declines ahead. The company reported applications fell 25 percent from the third quarter and unclosed loans dropped 29 percent to $25 billion.
Wells Fargo cut about 6,000 jobs last year in its mortgage business, Goyda said. Total employment at year-end was 264,900, according to the bank’s earnings statement.