Wells Fargo Shifting Staff to Lower-Cost Areas

A series of scandals having to do with aggressive sales quotas and altered business-customer documents has put the company in the regulatory and public crosshairs. Then in May, the San Francisco-based financial services giant announced it would look to trim $4 billion from future expenses. And just two weeks ago, news surfaced about the company exploring the idea of combining its two retail brokerage businesses in a restructuring initiative to increase efficiency.

The onslaught of news would have any Wells Fargo employee who is paying attention wondering where they fit in.

But bank officials say the cost-cutting and potential restructuring could actually bolster its St. Louis operations as the company looks to relocate some of its mid- and back-office functions from pricey top-tier cities such as New York or San Francisco to cheaper alternatives.

St. Louis is on a list of a dozen cities the company plans to add jobs to over the coming years, they say.

As jobs become available — either through attrition or from new jobs being created — they’ll increasingly be offered in St. Louis, as well as other target cities on that list, which includes Minneapolis; Des Moines, Iowa; San Antonio, Texas; and Dallas in the central region.

“With technology and other things, you can pretty much work most jobs in any location,” said Wendy Wagner, a recruiting manager at Wells Fargo in St. Louis. “The standard of living (in St. Louis) is very competitive to high-cost locations like San Francisco or New York, so it’s appealing to us to fill jobs in St. Louis.”

Other target cities are Atlanta; Charlotte, North Carolina; Denver; Portland, Oregon; Phoenix; Raleigh, North Carolina; and Salt Lake City.

Wells Fargo Chief Executive Officer Tim Sloan told the Post-Dispatch in May that St. Louis-based Wells Fargo Advisors would probably feel relatively little pain from the $4 billion cost reduction, saying the brokerage unit “has been a net recipient of team members relative to some other areas,” though no number was provided.

A Wells Fargo spokeswoman said the company had capacity for an additional thousand employees at its St. Louis campus, situated just west of downtown at the intersection of Jefferson Avenue and Market Street.

Moving non-customer-facing positions to more affordable parts of the country is part of a growing trend as big financial firms such as Wells Fargo catch up from several decades’ worth of mergers and acquisitions, which left these firms with legacy locations that have created regional hubs spread across the country.

In Wells Fargo’s case, its St. Louis roots date to its 2008 acquisition of Wachovia.

A recent report from global real estate firm JLL on financial services operations centers pegged St. Louis as an emerging market for potential growth.

“The last two decades have been a period of significant consolidation in banking,” said Christian Beaudoin, JLL’s senior director of research who spearheaded the report. “There is certainly a trend of banking companies around the country and world moving operations and processing jobs to markets that are more affordable, but still have strong talent pools with lower wages and cost of living. St. Louis fits well into that mix.”

Beaudoin said the trend was beginning to play out in other sectors, too.

In St. Louis, companies such as Square, Cushman & Wakefield, KPMG and Nestlé have already made such moves.

Square, the Silicon Valley payments company founded by native St. Louisans Jack Dorsey and Jim McKelvey, announced this year it would add 300 jobs over the next five years in the Cortex innovation district, in effect doubling its workforce here. Most of those jobs are to be compliance and customer support.

Cushman & Wakefield, the commercial real estate company, said in 2016 it would add 600 jobs to its already big presence in the St. Louis area. The new jobs, which were to be spread over a variety of back-office functions, are being added to the company’s Town and Country office.

KPMG and Nestlé, meanwhile, have committed to adding nearly 500 information technology positions in downtown St. Louis.

“This has implications in other industries as well where back office work for insurance companies, health care companies and increasingly tech firms are moving (jobs) from high-cost coastal markets to more affordable markets,” Beaudoin said.