Among the growing list of many companies bracing for layoffs is now Wells Fargo, who has seen their U.S. loan volumes "collapse".
The fall off in loan volume has left some workers "idle", according to a new CNBC report. This, in turn, has them worried about further job cuts.
In the early weeks of Q4, the bank had about 18,000 loans in its pipeline, the report says. This is down an astonishing 90% from a year earlier when the pandemic housing boom was in full swing.
The dropoff in loan volume is at least partly attributable to a slowing housing market as rates have risen. With the Fed raising rates again this week, it doesn't look like the spigot on loans is going to be re-opening anytime soon.
Other housing loan companies, like Rocket Mortgage, are also expected to be downsizing as a result of the slowing activity in housing.
Wells Fargo "has historically been the most reliant on mortgages" out of all major U.S. banks, CNBC notes.
CFO Mike Santomassimo had already warned about the slowdown in mid-October, stating: “We expect it to remain challenging in the near term. It’s possible that we have a further decline in mortgage banking revenue in the Q4 when originations are seasonally slower.”
The bank said this week: “The changes we’ve recently made are the result of the broader rate environment and consistent with the response of other lenders in the industry. We regularly review and adjust staffing levels to align with market conditions and the needs of our businesses.”