Cortez Masto slams Wells Fargo for laying off hundreds in Reno, outsourcing jobs

Jason Hidalgo | Reno Gazette-Journal

Show Caption Hide Caption Senator calls for firing of Wells Fargo CEO Massachusetts Sen. Elizabeth Warren told Wells Fargo CEO Tim Sloan he should be fired and that the Federal Reserve should remove all company board members who served during the fake bank account scandal. (October 3)

One of Nevada's top politicians is questioning Wells Fargo’s decision to lay off hundreds of Reno employees and outsourcing call center jobs despite reaping significant benefits from the tax cuts passed last year.

In a letter to Wells Fargo CEO Timothy Sloan obtained by the Reno Gazette Journal on Wednesday, U.S. Senator Catherine Cortez Masto, D-Nev., slammed the company for laying off about 340 employees after it announced plans in June to close its Reno call center.

Cortez Masto questioned the timing of the layoffs, which is occurring just six months after the passage of the tax reform bill that was signed into law by President Donald Trump in December.

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“It is alarming that these layoffs are occurring despite the astronomical benefits that Wells Fargo will receive from the recently passed Tax Cut and Jobs Act of 2017,” Cortez Masto wrote.

Cortez Masto cited a report from Goldman Sachs that projects a $3.7 billion windfall for Wells Fargo from the tax cuts. The number is more than three times the $1 billion fine levied by federal regulators against the company this year for abuses related to opening millions of fake accounts under its customers’ names.

Wells Fargo cited decreased call volume to its call centers for the staff reductions, particularly as more people choose self-service options.

“A completed review of the Reno location has resulted in the difficult decision to close the location,” said Anthony Timmons, a Wells Fargo spokesman. “This decision will result in the displacement of a couple hundred Wells Fargo employees in the location.”

Layoffs in Reno, hiring outside the United States

The Reno layoffs are part of several that have been announced by the company across the country.

In March, for example, Wells Fargo announced that it was laying off 593 service center employees in North Carolina — one of the biggest job cuts the state has seen in five years, according to the Charlotte Observer.

Last year, the company announced several call center layoffs, including 460 in Pennsylvania, 120 in South Carolina and 72 in Washington state.

The layoffs occur as Wells Fargo expands hiring outside of the United States.

In May 2017, the company announced it is further expanding its presence in the Philippines by building a new center that can house 7,000 employees tasked with providing customer support. Indiana Sen. Joe Donnelly questioned the announcement last year during an Oct. 3 hearing by the U.S. Senate Committee on Banking, Housing and Urban Affairs with the Wells Fargo CEO.

“I’m concerned by the outsourcing of call center jobs,” Donnelly said. “Did you let people go here in the states and add people in the Philippines?”

Sloan answered yes after being pressed a second time by Donnelly but also pointed out that the company had 15,000 job openings in the United States, which accounts for about 90 percent of its employee base. Laid-off workers are also given an opportunity to move to other jobs at Wells Fargo, Sloan added.

“Generally, our track record is we hire rehire between 70 to 80 percent of each of those folks into another job in Wells Fargo,” Sloan said.

Employees affected by the layoffs will receive separation benefits as well as career transition assistance and resources, Timmons said.

A limited number of employees at the Reno call center will be moved to other Wells Fargo locations in the United States and receive relocation assistance. Wells Fargo has no plans to relocate any of the affected positions to its international locations, Timmons said.

Cortez Masto remains critical of the company, pointing to a Wall Street Journal report that Wells Fargo was planning a stock buyback of up to $24.5 billion just a few weeks after it announced layoffs in Reno.

“Wells Fargo must take seriously its responsibility to treat its employees fairly and to operate in good faith as a member of the Nevada community,” Cortez Masto said.

Wells Fargo, meanwhile, confirmed that it has received Cortez Masto's letter.

“We are in the process of reviewing Sen. Cortez Masto’s letter, and plan to provide a response soon,” said Michael King, vice president of corporate communications for Wells Fargo's southwest region.

Read the full letter from Cortez Masto here: