Wells Fargo Tries New Cost-Saving Initiative
Despite posting record earnings and cutting expenses in the first quarter, San Francisco-based Wells Fargo & Company recently announced that it has implemented a new cost-saving initiative called Project Compass.
Wells Fargo CEO John Stumpf told investors last week that the company's reduced first-quarter expenses do not reflect the benefits that the company expects from Project Compass, which was launched last year.
According to Wells Fargo Chief Financial Officer Timothy Sloan, Project Compass is an effort to improve the company's efficiency and become more cost effective without a reduction in revenue.
The company did not provide additional details about the program but said that it would this summer. According to the Star Tribune, ideas for cutting costs will come directly from Wells Fargo's employees instead of senior management.
“We want to start from the bottom up and talk to all of our folks, as many of our folks as we can that are closest to the customers, figure out what we can do to improve their ability to deliver better products and services more efficiently to the customer,” Sloan told investors.
Earlier this month, Wells Fargo announced that it will lay off 1,900 employees-including 274 in Minnesota-from its home mortgage division as the demand for mortgage loan applications declines. A majority of those positions were interim positions and are reportedly separate from the Project Compass initiative.
Wells Fargo is among the state's 10-largest employers with about 20,000 employees in Minnesota. The cuts earlier this month in its mortgage division represent about 1.4 percent of its local work force and more than 3 percent of its national mortgage division work force.
Click here to read more in the Star Tribune about Wells Fargo and its future cost-saving plans.