Wells Fargo announced that it will trim its workforce in 2026 and expects higher severance costs in the fourth quarter of 2025. The CEO’s remarks were made at the Goldman Sachs Financial Services conference on December 9 2025, the same day the company disclosed the plan.
The bank has already cut roughly 24 % of its headcount since the 2020 peak, leaving about 211,000 employees as of September 30 2025. While the CEO did not disclose a precise number of positions to be eliminated, the statement that “less people as we go into next year” signals a continuation of the cost‑discipline drive that has been a hallmark of the bank’s post‑regulatory remediation strategy.
Severance costs are expected to rise in Q4 2025. Wells Fargo recorded a $296 million charge for severance in Q3 2025, and management indicated that the fourth‑quarter expense will be higher, reflecting the anticipated headcount reductions and the bank’s commitment to fair employee transition packages.
Artificial intelligence is a key lever in the bank’s efficiency agenda. CEO Charlie Scharf noted that AI could change how work is carried out and that “anyone who sits here today and says that they don’t think they’ll have less headcount because of AI either doesn’t know what they’re talking about or is just not being totally honest.” The bank is rolling out AI tools to streamline operations, which is expected to reduce manual labor and support the planned workforce cuts.
The announcement comes after the Federal Reserve lifted Wells Fargo’s asset cap in June 2025, giving the bank greater flexibility to grow its balance sheet and pursue new opportunities. Analysts have upgraded the bank’s outlook, citing the removal of regulatory constraints, improved efficiency ratios, and a strong earnings trajectory. The workforce reduction is framed as a step toward a leaner operating model that will free capital for future growth initiatives.
Overall, the headcount cut and higher severance costs underscore Wells Fargo’s focus on cost discipline and operational efficiency. The move is part of a broader strategy to streamline the organization, integrate AI, and capitalize on the newly available growth space created by the asset‑cap removal. Investors and stakeholders will watch how the bank balances short‑term cost savings with long‑term investment in technology and talent.
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