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Wells Fargo Does U-Turn on Cutting Perk for High-Earning Workers

Bloomberg logoBloomberg 10/23/2020 Hannah Levitt
A pedestrian wearing a protective mask walks past a Wells Fargo & Co. bank branch in New York, U.S., on Thursday, July 9, 2020. Wells Fargo is scheduled to release earnings figures on July 14. © Bloomberg A pedestrian wearing a protective mask walks past a Wells Fargo & Co. bank branch in New York, U.S., on Thursday, July 9, 2020. Wells Fargo is scheduled to release earnings figures on July 14.

(Bloomberg) -- On Wednesday, Wells Fargo & Co. told high-earning employees it would stop matching contributions to their 401(k) plans. By Friday, the bank reversed course.

The about-face followed a swift backlash from affected employees, who earn more than $250,000 a year, according to people with knowledge of the situation.

The measure was part of a larger set of changes the San Francisco-based firm rolled out this week to put “greater emphasis on how we support our lower-paid employees through our compensation and benefits program,” company spokesperson Beth Richek said in a statement. “After additional review and consideration, we have decided to continue offering the 6% company matching contribution to all 401(k) plan eligible employees.”

The drama unfolded as Wells Fargo undertakes a years-long cost-cutting initiative under Chief Executive Officer Charlie Scharf, who took over last October. He has repeatedly lamented the firm’s spending and pledged to eventually shave $10 billion in annual expenses. The company, which employed 274,900 people at the end of September, has embarked on workforce reductions that could ultimately number in the tens of thousands.

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©2020 Bloomberg L.P.

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