Wells Fargo has reversed course from a decision it made mid-week last week to stop matching 401(k) contributions for its highest earning employees. As Bloomberg notes, the decision didn't go over very well with employees and, by Friday, the bank had already reversed course on its decision.
There was "swift backlash" to the decision from affected employees.
The affected employees earn more than $250,000 per year, the report notes, and the cut was supposed to be part of a plan to shift the bank's focus to its lower paid employees. A bank spokeswoman said the original change was supposed to put “greater emphasis on how we support our lower-paid employees through our compensation and benefits program.”
She continued: “After additional review and consideration, we have decided to continue offering the 6% company matching contribution to all 401(k) plan eligible employees."
The cuts come amidst larger scrutiny on the bank, which is in the process of a years long cost cutting initiative. CEO Charlie Scharf is focused on cutting $10 billion in annual expenses for the bank.
Recall, we noted weeks ago that the bank was also in the midst of laying off employees, with more layoffs likely to follow.
A week after Wells Fargo and a handful of other Wall Street banks announced plans to re-start layoffs now that their coronavirus-inspired (and, in some cases, PPP-inspired) moratoriums had come to an end, the San Francisco-based bank best known in recent years for scamming retail customers and botching small business refi loans has announced the first 700 layoffs in a scheme that will eventually cull tens of thousands of jobs.
The bank said the cuts will impact business lines across the division. The commercial banking division typically services businesses with at least $5 million in annual sales, according to a company spokeswoman.
That would suggest that Wells Fargo is cutting back more on the commercial banking side as it re-focuses on its consumer-banking strengths, like mortgages, amid a booming housing market and rock-bottom interest rates.
Wells Fargo has long been the US banking industry's largest employer, given its domestic, retail-oriented focus, and traditional dominance west of the Mississippi.