San - Francisco-based Wells Fargo will close its 638 Wells Fargo Financial stores. 6600 bank branches will not be affected by the massive restructuring of the division of consumer finance companies. Downsizing may include hundreds in California and dozens of Bay Area.
"Economics of individual channels Wells Fargo Financial, no longer exist," said David Kvamme, president of Wells Fargo Financial. "Our customers have access to one of the largest banking and mortgages online store in the United States."
The Bank operates 74 Wells Fargo financial services industry in California, according to information from the official website of the company.
Of these, 11 are in the Bay Area, business website shows. Local Wells Fargo Financial stores in Fremont, Concord, Pleasanton, San Leandro, San Pablo, San Jose, Sunnyvale, Gilroy, San Francisco, Santa Rosa and Fairfield.
Downsizing may be about 435 in California and 65 in the Bay Area - if the staff reductions mirror the proportion Wells Fargo stores in the state and region.
Wells Fargo on Wednesday did not provide any specific information about the local impact of job cuts.
Primary surprising that for so long, "said Marian Kessler, an analyst and portfolio manager in Portland, Oregon-based Becker Capital Management.
"It's like locking the barn after the horse got out," said Kessler. "Better late than never."
In the midst of a housing bubble, mortgage loans were generally given to borrowers spots on their credit or income, which was less reliable.
The setbacks for these types of loans entered the worst financial crisis in the country over the past decade.
"Banks are finally gain an understanding of proper understanding of underwriting that is necessary for the provision of credit to people," said Kessler.
About 2,800 jobs will be eliminated in part over the next two months. A further 1000 jobs will be cut over the next 12 months.
"We know that this decision will be very difficult for those on the team members and their families who will be affected," said Kvamme, Wells Fargo Financial president.
Wells Fargo Financial has approximately 14,000 employees. So job cuts of 27 per cent of the total workforce of the organization. Wells Fargo had 267,400 employees at the end of the first quarter.
"This is a big piece of its consumer finance unit," said Kessler. "This is a fairly significant job losses.
The remaining staff will be transferred to other units in Wells Fargo, the company said.
"We have already identified positions for thousands of our employees and strive to find new positions, as many members of the team influence as possible," said Kvamme.
The reduction was the inevitable consequence of the collapse of housing bubble - and the era of easy money and free credit policy, analysts say.
"Wells Fargo was not alone in providing mortgage loans. Each bank was such that the whole group did it," said Kessler. "Unfortunately, many of these jobs have been created from the belief the credit cycle will go on indefinitely."
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