Wells Fargo expects more job cuts, will roll out AI gradually in 2026

(Reuters) - Wells Fargo expects more cuts to its workforce and sees higher severance expenses in the current fourth quarter, CEO Charlie Scharf said on Tuesday, adding that artificial intelligence was set to change the way its business works.

"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," Scharf said on the sidelines of a Goldman Sachs financial services conference.

"We'll likely have more severance in the fourth quarter."

AI COULD CHANGE HOW WORK IS CARRIED OUT

Scharf said that AI was extremely significant, both in terms of the efficiencies it can drive and "what it is going to potentially do to headcount".

He said AI would not entirely replace humans, but could change how work is carried out. He reiterated that the expected workforce decline reflects Wells Fargo’s push for efficiency, echoing remarks he made in an interview last month.

The CEO said Wells Fargo will roll out AI gradually over the next year and beyond, framing the changes as part of efforts to boost efficiency. He described the shift as a "positive reality" for the bank.

AI is expected to lead to some workforce reductions, with substantial opportunities in the technology, Scharf said in an interview last month.

Wells Fargo had 275,000 employees when Scharf joined in 2019. The bank has a little over 210,000 employees as of September 30, 2025.

At the Goldman conference, he said that the bank was not yet as efficient as it would be 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," Scharf said.

ACQUISITION HURDLE RATES ARE HIGH

The US Federal Reserve lifted a $1.95 trillion asset cap on Wells Fargo in June, ending a key sanction tied to the bank’s fake-accounts scandal and paving the way for expansion.

Analysts and investors expect Wells Fargo to press ahead with growth under CEO Scharf, who took the helm in 2019 following the fake-accounts scandal that triggered public backlash and billions of dollars in penalties.

However, Scharf said on Tuesday that Wells Fargo would only pursue acquisitions offering strong financial returns and clear strategic value for investors, and was under no pressure to snap up companies.

"We have no interest in doing something which could just add a little bit of earnings to the company," he said.