Wells Fargo CEO warns severance costs could hit $1B this quarter as more layoffs loom

Wells Fargo CEO Charles Scharf warned severance costs this quarter could hit nearly $1 billion as the mega bank prepares for fresh layoffs in the coming year.

“We’re looking at something like $750 million to a little less than a billion dollars of severance in the fourth quarter that we weren’t anticipating,” Scharf said at a Goldman Sachs investor conference in New York Tuesday.

Wells Fargo has already fired roughly 11,300 employees in 2023 — almost 5% of its nearly 230,000 workforce.

But in a recent earnings call Scharf said the bank “is not even close” to where it needs to be in terms of efficiency.

Scharf conceded he will need to be “more aggressive” at reducing headcount as turnover recently has slowed sharply and people hold onto their jobs amid increased economic uncertainty. It’s unclear how many people will ultimately get cut.

Wells Fargo isn’t the only bank dealing with a glut of employees.

Earlier this year, Morgan Stanley CEO James Gorman said the bank was facing the same issues.

“Attrition has been remarkably low, and that’s something that we’ve just got to work through,” Gorman said.

At Goldman Sachs, the bank has been quietly weeding people out — cutting hundreds of employees in what is being described as “stealth layoffs” since the cuts are much smaller in scale and since the firm appears to be making every effort to keep them quiet.

In October, CNBC reported banks including Goldman Sachs and Morgan Stanley have already reduced headcount by a combined 20,000 roles this year alone, based on an analysis of their quarterly filings — and that even more cuts could be on the horizon.

A spokesperson for Wells Fargo did not immediately respond to The Post’s request for comment.

Even as Scharf conceded the bank will need to cut costs, he also said he believed both consumers and business will remain strong and the overall economy is closer to a “soft landing.”