The once well respected and well managed Wells Fargo bank continues to be rocked by the aftermath of a financial scandal that saw employees allegedly pressured by company incentives and policies to crate a massive number of bogus consumer accounts in order to meet production quotas and reap incentive rewards. Therefore, it should not come as a shock when socially-posturing politicians in the states of California and Ohio decided to signal their virtue by withholding a significant amount of state business. The end result is that the bank will be laying off approximately 500 employees with more cuts likely in the near future.
The current cuts involve the Lehigh Valley call center in Bethlehem Pennsylvania. Of course, company public relations personnel deny that the recent scandals plaid a part in the decision, citing that this is just a normal response to business conditions. Possible part of the planned closure of 450 brick-and-mortar branches which would contribute to a desired $2 billion reduction in operating expenses.
The entire banking industry is attempting to maintain their physical presence in a banking community that has been transitioning to self-service options such as ATM’s and online banking for years. I, myself, have rarely visited my bank in person, preferring to use electronic checking and drive-through ATMs for deposits.
The state business ban is not permanent and amount to continuances of existing punitive state policy. In the case of California, the ban will be extended for one year and for Ohio, an additional six months. After all, the politicians realize that Wells Fargo generates lobbying dollars in a time when political contributions will be sought for the 2018 congressional and 2020 presidential election cycle.