Wells Fargo & Co, the fourth-largest U.S. bank by assets, said on Wednesday it is closing more than 600 Wells Fargo Financial offices and will no longer originate non-prime mortgages.
The bank said the Wells Fargo Financial offices are no longer necessary after its 2008 acquisition of Wachovia Corp and it will offer mortgage services through its other banking locations.
The bank, which is one of the largest mortgage originators in the United States, said it will incur charges of about $185 million in total related to the closures. About $137 million, or 2 cents a share, will be reported in second-quarter earnings on July 21 as severance costs, according to the bank's statement.
San Francisco-based Wells Fargo will cut about 2,800 employees in the next 60 days from its 14,000-person Wells Fargo Financial unit and it will likely cut a further 1,000 in the next 12 months, the bank said in a statement.