Wells Fargo is struggling after laying off 5,600 workers — and paying millions in severance

Americans had to deal with a lot in 2025, which included thousands being laid off from work. Rising costs of running businesses, paired with technological advancements in artificial intelligence, saw thousands of roles rendered obsolete, which led to mass layoffs. One of the many companies that indulged in this practice was Wells Fargo, and as a result, they had to pay millions of dollars in severance pay. This massive added expense saw their net income fall well short of what was expected.

As per a report in the New York Post, Wells Fargo reported a net income of $5.4 billion for the fourth quarter, which was significantly higher than the $5.1 million they had earned in the same time the year before. However, the lender also had to pay a whopping $612 million in severance pay as it laid off 5,600 workers. As a result, expenses for the year stood at $13.7 billion.

This was higher than the $13.6 billion analysts had predicted and had an impact on the company’s net income for the whole of 2025. Analysts expected Wells Fargo to end the year with $21.6 billion in net income, but the company only managed to record $21.3 billion. Their shares also sank by an early 3% in premarket trading to $90.90.

Wells Fargo CEO Charlie Scharf said that the company had also spent a lot of money investing in infrastructure and business growth. “We have funded significantly increased investments in infrastructure and business growth by driving greater savings,” he said, before adding, “Evidence of increased growth can be ‌seen across the company.”  Scharf took over the CEO role in 2019 and has done a commendable job in growing the company so far. There was a 20% growth in new credit card accounts, a 19% jump in auto lending balances, 12% loan growth in commercial banking, and a 14% increase in investment banking fees.

“We have built a strong foundation and have made great progress in improving growth and returns, though we have operated with significant constraints. We are excited to now compete on a level playing field and are able to dedicate even more resources with the ability to grow our balance sheet,” the CEO added.

Wells Fargo came into the spotlight in early 2025, after a different report by the NY Post stated that the bank had refused to help an 83-year-old account holder, who was scammed out of almost $15,000. She had written a check for $14,952.52 that was meant to pay off a part of her car loan. Unfortunately, the check was cashed by an unauthorized party.

When she went to the lender for help, she was met with a cold shoulder. “The claim will remain denied, and we will not reimburse you for the disputed transactions,” the bank reportedly wrote. As per the report, this took a toll on the account holder. “It’s been very sad, and more so to see we can’t get through a bank visit without her vomiting or being in tears,” the victim’s granddaughter had said.

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