As part of a nationwide streamlining expected to result in a 10% reduction in headcount, Wells Fargo Bank has merged its business and commercial banking lines in the Idaho region under one manager.
“We’ve had, historically, two lines of business: Business customers and corporate customers,” said Don Stafford, market executive for commercial banking, who splits his time between Boise and Spokane.
Business banking covered businesses with revenue of $5 to $20 million, while commercial banking covered businesses with revenue of $20 million up to several billion. Wells Fargo has now merged those two groups, he said.
The San Francisco-based company announced about a year ago its intention to lay off between 5% and 10% of its employees within the next three years. As of October, Wells Fargo had 74 branches in Idaho.
The merger will boost efficiency and consistency, said Stafford, previously regional vice president for middle market banking.
“Those lines of business effectively do very similar work in that we’re lending money and providing other bank services to those customers,” he said.
But because they were different organizations, they had different processes, which will now be reviewed to determine the most effective path forward, he said.
“Candidly, one of the challenges we had was the bank had the capability to provide many things, but they weren’t always consistently applied or delivered,” Stafford said. “That’s what we’re driving for.”
In addition, as businesses grew from “business banking” to “commercial banking” size, the transition could sometimes be clunky, he admitted.
“All businesses start at some size and grow, and we wanted to make sure we were positioned to take care of them throughout the growth cycle.”
While the reorganization has resulted in some “redundancy,” possible layoffs would be primarily focused on the executives, though there may be back office duplication as well going forward, Stafford said.
“Leadership is one of the biggest areas we’ve streamlined,” he said. “We still have a need for our bankers and support people, and we still need those people to service the same companies.”
Stafford wouldn’t provide specifics, but said the company was looking for new positions for those people and that the number was “not large.”
“We’re not seeing significant redundancy in Idaho,” he said.
Moreover, Boise still has same team leaders – Don Collins in business banking and Brian Cook in commercial banking – now reporting to him.
In addition, Wells Fargo has business specialists, intended for small business customers, in a number of its branches, Stafford said. The business banking and commercial banking staff are primarily in corporate offices in Boise and Spokane, and Wells is not adding any offices at this time, he said.
Kristi Hagan, based in Coeur d’Alene, handles North Idaho down to Lewiston, while Collins covers Idaho Falls, Stafford said. Stafford’s territory also covers Eastern Washington to Yakima, and Eastern Oregon to Bend.
Wells Fargo nationwide may undergo further restructuring. Erika Najarian, an analyst with Bank of America Merrill Lynch, had noted during the Q1 2019 earnings call on April 12 that Wells still had more employees than comparable banks with larger asset bases, and that the organization was operating under an interim CEO while searching for a permanent one.
“With the new leadership coming in, the market is giving you sort of a pass, so to speak, to really rethink a company beyond sort of taking 10% off of your headcount in three years,” Najarian asked during the call.
There could be opportunities for further streamlining and efficiencies, acknowledged John Shrewsberry, senior executive vice president and chief financial officer, on the call.