More AI, More Layoffs, says Wells Fargo CEO

Wells Fargo expects its workforce to shrink again in 2026 as the bank expands its use of generative AI across core operations. CEO Charlie Scharf outlined the plan during the Goldman Sachs U.S. Financial Services Conference, telling investors that fourth-quarter severance costs will rise and that additional headcount reductions are planned next year.

According to Scharf, generative-AI coding tools have increased engineering productivity by 30% to 35%, describing the gain as a measurable shift inside the technology organization. He said the rollout of AI across the rest of the bank will be gradual but steady, and that technology “is going to potentially do to headcount what we’ve seen technology do to headcount over a long period of time”.

Wells Fargo has been restructuring since Scharf’s arrival in 2019, cutting operating costs and expanding investments in risk and compliance systems. The bank employed about 275,000 people in 2019 and reported a little over 210,000 as of Sept. 30, 2025, a decline documented in quarterly filings and referenced in earlier reporting.

The bank is now operating without the Federal Reserve's growth restriction for the first time in nearly seven years. The Fed lifted Wells Fargo’s asset cap in June 2025, saying the bank had met the required governance and risk-control benchmarks. Wells Fargo confirmed the removal in its own release the same day. With the cap removed, Wells Fargo has more freedom to redirect capital toward expansion initiatives while continuing the multiyear cost reduction that began earlier in Scharf’s tenure.