Wells Fargo anticipates further reductions in its workforce and higher severance costs in the present fourth quarter, reported Reuters, citing CEO Charlie Scharf. 

Artificial intelligence (AI) is expected to significantly impact the bank’s operations, particularly regarding efficiency and staffing levels. 

While AI is not expected to replace human employees entirely, it could alter how work is performed, the CEO said. 

The anticipated workforce reduction reportedly aligns with Wells Fargo’s ongoing efforts to improve efficiency. 

Speaking on the sidelines of Goldman Sachs financial services conference, Scharf, said: “We have gone through the budgeting process, and even pre-artificial intelligence, we do expect to have less people as we go into next year. We’ll likely have more severance in the fourth quarter.” 

“AI is extremely significant, both in terms of the efficiencies it can drive and what it is going to potentially do to headcount,” he added. 

Wells Fargo plans to introduce AI incrementally throughout 2026 and beyond as part of its strategy to enhance operational efficiency. 

Scharf described the planned adoption of AI as a “positive reality” for the organisation. 

In a recent interview, he noted that AI is likely to contribute to some workforce reductions while also presenting significant opportunities in technology. 

Since Scharf joined Wells Fargo in 2019, the bank’s employee count has decreased from 275,000 to just over 210,000 as of 30 September 2025. 

Scharf said that the bank has not yet achieved the level of efficiency possible with AI. 

“Gen AI tools within our engineering workforce were 30% to 35% more efficient in terms of writing code today. We’ve not reduced the number of people we have coding today, but we’re getting a lot more done and that’s real efficiency,” he said. 

Commenting on potential acquisitions, Scharf said Wells Fargo would only consider those that deliver substantial financial returns and clear strategic benefits. “We have no interest in doing something which could just add a little bit of earnings to the company.” 

In June this year, the US Federal Reserve lifted a $1.95tn cap on Wells Fargo’s total assets, which was imposed in 2018 after a series of scandals exposed at the bank.  

The cap was introduced following revelations that Wells Fargo employees had opened unauthorised accounts to meet sales targets.   

Investigations found that staff moved funds without customer consent, charged unnecessary fees, and enrolled clients in credit products without approval.