Additional Coverage:
- Wells Fargo is struggling after laying off 5,600 workers — and paying millions in severance (marketrealist.com)
Wells Fargo Navigates Financial Headwinds Amidst Mass Layoffs and Severance Payouts
[City, State] – Wells Fargo is grappling with the financial repercussions of significant layoffs in 2025, which saw 5,600 employees depart and resulted in substantial severance payments. These added expenses have caused the banking giant’s net income to fall short of analyst expectations for the year, even as the company reports a stronger fourth quarter compared to the previous year.
According to a report by the New York Post, Wells Fargo posted a net income of $5.4 billion for the fourth quarter of 2025, an increase from $5.1 million in the same period of 2024. However, the bank incurred a hefty $612 million in severance costs related to the 5,600 job cuts. This pushed the company’s annual expenses to $13.7 billion, surpassing the $13.6 billion analysts had projected.
The higher-than-anticipated expenses directly impacted Wells Fargo’s overall net income for 2025, which reached $21.3 billion, falling short of the $21.6 billion analysts had forecast. In early premarket trading, the company’s shares experienced an initial dip of 3%, settling at $90.90.
Wells Fargo CEO Charlie Scharf acknowledged the financial challenges but emphasized the company’s strategic investments in infrastructure and business growth. “We have funded significantly increased investments in infrastructure and business growth by driving greater savings,” Scharf stated, adding, “Evidence of increased growth can be seen across the company.”
Since taking the helm in 2019, Scharf has overseen notable growth in various sectors of the company. These include a 20% increase in new credit card accounts, a 19% jump in auto lending balances, 12% loan growth in commercial banking, and a 14% rise in investment banking fees.
Scharf expressed optimism for the future, noting, “We have built a strong foundation and have made great progress in improving growth and returns, though we have operated with significant constraints. We are excited to now compete on a level playing field and are able to dedicate even more resources with the ability to grow our balance sheet.”
The bank also faced public scrutiny earlier in 2025 when a separate New York Post report detailed its refusal to assist an 83-year-old account holder who was scammed out of nearly $15,000. The customer had written a check to pay off a portion of her car loan, which was subsequently cashed by an unauthorized party.
Despite her pleas for help, the bank reportedly denied her claim, stating, “The claim will remain denied, and we will not reimburse you for the disputed transactions.” The victim’s granddaughter highlighted the emotional distress caused by the incident, noting, “It’s been very sad, and more so to see we can’t get through a bank visit without her vomiting or being in tears.”