Amid a decline in mortgage business, Wells Fargo last week notified Iowa state authorities of its plans to lay off 36 employees.
The workforce reduction came from its Des Moines, Clive, Ankeny and West Des Moines offices, according to a WARN notice filed in the Iowa Workforce Development. The Des Moines metropolitan area is the headquarters for the bank’s home mortgage division. Employment termination date is scheduled for Dec. 31.
Wells Fargo didn’t describe the reason for the layoff or disclose how many employees are left in the home mortgage division.
“We regularly review and adjust staffing levels to align with market conditions and the needs of our businesses,” a spokesperson said. “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.”
The latest layoff announcement from the country’s second-largest lender comes amid faltering home lending business. Home lending revenue dropped to $972 million in the second quarter, a sequential drop from the previous quarter’s $1.5 billion. In the second quarter of 2021, the company posted $2.1 billion in revenue from home lending.
More than 240 positions were eliminated from the Iowa offices this year and an additional 75 employees will be laid off in October, according to the Iowa Workforce Development.
Amid a mortgage market is projected to shrink nearly in half in 2023, Wells Fargo is planning to reduce its presence in mortgage. Bloomberg reported last month that it is mulling a cut to its correspondent lending and third-party servicing business.
In correspondent lending, Wells Fargo funds the loan arranged by outsiders and the bank is concerned that it would have to be responsible for “reputational damage” when it finances large amounts of loans originated by other firms.
Bloomberg also said Wells Fargo also plans to downsize its third-party servicing, including the servicing of Federal Housing Administration (FHA) loans.
Depository banks have been reducing their mortgage staffing levels as they reassess mortgage lending in a higher rate environment. Citi, JP Morgan Chase and U.S. Bank have also shed an undisclosed number of jobs in their mortgage divisions this year.
Wells Fargo ranked as the second-largest mortgage lender in the nation by volume in the second quarter, just behind Rocket Mortgage‘s $34.54 billion in volume, according to Inside Mortgage Finance.