Wells Fargo to cut 3,800 jobs





NEW YORK (CNNMoney.com) -- Wells Fargo will cut 3,800 jobs and close 638 stores in its financial division, the company said Wednesday.

The cuts are a result of the company closing Wells Fargo Financial, the company's consumer finance division that made "non-prime" home loans.

About 2,800 of the job cuts will happen in the next 60 days, and the remaining 1,000 positions will be eliminated over the next 12 months.

Wells Fargo's (WFC, Fortune 500) 2008 merger with Wachovia eliminated the need for a separate financial division, the company said.

"The economics of a separate Wells Fargo Financial channel are no longer viable," David Kvamme, president of Wells Fargo Financial, said in a statement.

Charges related to the restructuring will total $185 million, Wells Fargo said. About $137 million of those costs, or 2 cents per share, will be recorded in the second quarter of the year for severance. Most of the remaining charges will be incurred in the third quarter.

But ongoing cost savings should offset the charges within the next 18 months, the company said.