How is AI Driving Wells Fargo's Job Cuts?

Wells Fargo & Company reported second quarter 2026 earnings on July 14, 2026, disclosing that its headcount fell to 197,000, down 15,000 from a year earlier and marking the 24th consecutive quarter of reductions. The San Francisco-based bank said continued investment in technology and AI is supporting its efficiency initiatives.

According to the company, the efficiency gains are helping offset broader investments across the business, including hiring branch bankers, investment advisers, commercial banking relationship managers, investment bankers and traders. The company also said it is increasing marketing spend, accelerating product development and increasing cyber defenses alongside its AI investments.

In its Wealth and Investment Management segment, the company launched Advisor Gateway during the second quarter. The platform gives advisers generative AI tools intended to help them serve clients and grow their practices, according to the company. Wells Fargo said it has invested more than $1 billion over the past several years to modernize the wealth management technology platform.

Wells Fargo reported net income of $6.4 billion for the second quarter, up 17% from a year earlier. The company said diluted earnings per share rose to $2, a 25% increase year-over-year, which included a $0.04 per share discrete tax benefit tied to the resolution of prior period matters.

The company said revenue grew 9% from a year earlier, with net interest income up 5% and non-interest income up 13%. Wells Fargo said average loans increased 12% and average deposits increased 10% compared with the prior year. It also reported a net loan charge-off ratio of 34 basis points, down 10 basis points from a year earlier, and said its return on tangible common equity rose to 17.7% for the quarter, compared with 15.2% a year earlier.

AI-Enabled Efficiency

The company said non-revenue-related expenses declined from a year earlier even as total non-interest expense rose 2%, driven primarily by higher revenue-related and incentive compensation. Wells Fargo attributed part of the expense discipline to ongoing efficiency initiatives, including the reduction in headcount.

Michael Santomassimo, Senior Executive Vice President and Chief Financial Officer, said the company expects to keep reducing headcount as automation efforts continue. "Certainly, technology and AI helps us get at aspects of that in a different way or faster than maybe in the past, but we expect that we'll continue to see more efficiency from here," Santomassimo said.

Charlie Scharf, Chairman and Chief Executive Officer, said the investments are part of a broader push to fund growth while maintaining expense discipline. Scharf said the company is "increasing our marketing investments, accelerating product development, investing in AI and increasing our cyber defenses."

Scharf said the company's underlying business trends give it confidence in reaching its medium-term return on tangible common equity target of 17% to 18% "in a reasonable time frame," adding that technology and efficiency initiatives remain central to that goal.

>

>