Wells Fargo & Co. cut more jobs in central Iowa again this week.
The banking giant laid off another 36 workers Thursday in its 10th round of cuts since April, according to a notice filed with Iowa Workforce Development. The largest private employer in the Des Moines metro, Wells Fargo has been laying off workers amid a slowdown in its Iowa-based home mortgage division.
The latest cuts brings the total number of affected local workers to 402 since April, according to state filings. The layoffs also come three weeks before Wells Fargo shares its next quarterly report.
"We regularly review and adjust staffing levels to align with market conditions and the needs of our businesses.," spokesperson Kevin Friedlander said in a statement Friday. "We work hard to identify opportunities for employees in other parts of the company so we can retain as many employees as possible. Where it’s not possible, we provide assistance, such as severance and career counseling."
Why is Wells Fargo laying off employees?
Spokespeople for the company have previously blamed a downturn in the home lending business this year. The Mortgage Bankers Association projected Monday that U.S. borrowers would take out 6.6 million mortgages this year, down 51% from 2021. The trade group expects the number of new loans to continue to drop next year, to 6 million.
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Nationally, construction on new homes and apartments dropped this spring and early summer, according to the U.S. Census Bureau. The trend reversed in August, with most of the growth coming from new multi-family units.
At Wells Fargo, the bank has recorded $2.46 billion in home mortgage revenue through the first six months of this year, down 43% from 2021. Net income is down 36% during that period, to $6.79 billion.
Chief Financial Officer Mike Santomassimo signaled that workers could lose their jobs during a call with analysts in July.
"It’s possible that we have a further decline in mortgage banking revenue in the third quarter," he said. "We are making adjustments to reduce expenses in response to the lower origination volumes, and we expect these adjustments will continue over the next couple of quarters.”
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The mortgage business has struggled as the Federal Reserve's Open Markets Committee has attempted to slow the decades-high inflation pace by increasing borrowing costs across the country. The Fed raised interest rates by 0.75 percentage points Wednesday and signaled that its board of governors believes it will send the country into a recession to tamp down inflation.