• Wells Fargo’s global workforce numbers some 266,000 people.
  • Wells Fargo posted a $2.4 billion loss in the second quarter
  • Year-to-date Wells Fargo shares have plunged 54.4%.

U.S. bank Wells Fargo (WFC) has begun cutting jobs in stark contrast to some of its peers, which have refrained from layoffs during the COVID-19 pandemic.

Under pressure to cut costs – especially after posting a $2.4 billion loss in the second quarter – the bank has been quietly slashing its workforce over the past few weeks, Bloomberg reported. The San Francisco-based lender also plans to enact deeper job cuts in the months and years ahead.

“Starting in early August, we resumed regular job displacement activity,” Beth Richek, a spokesperson for Wells Fargo, said in a statement. “We are at the beginning of a multiyear effort to build a stronger, more efficient company. We expect to reduce the size of our workforce through a combination of attrition, the elimination of open roles and job displacements.”

Wells Fargo agreed to suspend job cuts in the wake of the COVID-19 outbreak – but now it appears that workers targeted for layoffs in the early part of the year will be the first ones to be let go.

In July, Chief Executive Officer Charlie Scharf said the bank would have to cut $10 billion in costs.

“This cannot continue,” Scharf told analysts. “There’s no reason why as a management team we don’t have the ability to be as efficient as the rest [of our peers].”

Job cuts in the remainder of the year will likely involve management and underperformers, Bloomberg noted. However, the ultimate magnitude of job cuts has not yet been determined.

“We have a series of employees who’ve been told that their jobs will ultimately go away,” Scharf said. “But we are going to let some time pass as we got through the initial stages of the COVID crisis.”

Wells Fargo’s cost-cutting is also expected to hit its asset management arm.

Nico Marais, CEO of Wells Fargo Asset Management told Pensions & Investments they are actually in a hiring mode while "equally keeping a close eye on our costs to ensure that we can invest in areas of growth while increasing our margins." The division's assets under management totaled $578 billion as of June 30, up 12% from Mar. 31.

Brian Kleinhanzl, an analyst at Keefe, Bruyette & Woods, New York, said job cuts will probably impact the asset management unit.

"As a part of the company, [the division is] something that you would want to grow longer term," Kleinhanzl said. "In the near term, you may see job cuts. At the end the day, you want to grow and achieve scale. It is a scale business."

Wells Fargo’s global workforce numbers some 266,000 people.

Year-to-date Wells Fargo shares have plunged 54.4%. As of 3:23 Friday, they were trading $23.66, off 9 cents or 0.38%.