Sen. Chris Van Hollen (D-Maryland) is pressing Wells Fargo & Co. on its plans to eliminate more than 60 jobs from its Frederick office, asking the company’s chief executive officer to provide more information about the plans.
In a letter to Wells Fargo CEO Timothy Sloan dated Monday, Van Hollen raised concerns about that decision and other layoffs, as well as how Wells Fargo is using money it received as a result of tax reform legislation that was passed last year.
Wells Fargo announced last week that its office at 8480 Stagecoach Circle will lose 63 employees in its home mortgage’s servicing and account management division by later this summer.
Van Hollen’s letter said it was “deeply concerning” that Wells Fargo is laying off workers after receiving $3.4 billion from the tax bill, and noted that the company’s effective tax rate — the average rate at which a company’s profits are taxed — would drop nearly a third from what it paid in 2016.
It also cited plans by the company to lay off hundreds of employees in North Carolina, Pennsylvania, South Carolina, Wisconsin and New York, as well as a release from the company saying that it had increased its operations in the Philippines.
The company’s presence there grew from less than 100 workers to more than 4,000 between 2011 and 2017 and was building another site that will hold more than 7,000 employees, the letter said.
“In light of the considerable benefits you have received from the American people, I ask that you not continue with these layoffs and instead bring jobs back to the United States,” the letter said. “The tax windfall should not be used to establish foreign call centers or further enrich wealthy shareholders at the expense of American workers.”
The argument for the tax cut was that it would allow companies to use the benefits they got to invest in more U.S. jobs, Van Hollen said in an interview Monday.
The letter asked Sloan to provide Van Hollen’s office with the following information by July 23:
- How many of the 63 Frederick positions the company planned to send overseas.
- If those jobs weren’t being sent overseas, could they be replaced by bringing call center and processing jobs back to the United States.
- How many such jobs the company has sent overseas in the past five years.
- What the company is doing to help the displaced workers find other positions within the company and what services and benefits would be available to those who don’t find internal jobs.
- How Wells Fargo is investing in the long-term growth of its domestic workforce.
Wells Fargo spokeswoman Christina Carmichael said in an email Monday that the company had received Van Hollen’s letter “and we are in the process of reviewing it.”
The decision to eliminate the Frederick jobs was made after determining that the need for mortgage origination and servicing volumes had changed, Carmichael said.
Last week, she told The News-Post that the changes were due to fewer homes being in default or foreclosure, and the need to manage fewer vacant properties.
“We are committed to retain as many of our valued team members as possible and are working with them to identify other opportunities within Wells Fargo. Additionally, all impacted team members are eligible to receive pay and benefits through August 19,” Carmichael wrote Monday.
In October 2017, Sloan told Indiana Sen. Joe Donnelly (D) and the Senate Committee on Banking, Housing and Urban Affairs that of Wells Fargo’s roughly 270,000 employees, about 90 percent are in the United States.
Asked by Donnelly why the company sent jobs to the Philippines, Sloan said it makes sense to have employees based around the world so that they can have a 24-hour operation.
“In terms of how to efficiently and effectively run our business, we want to make sure our people are in the right place,” he said.
On Monday, Van Hollen said the company could easily run a 24-hour operation in the United States, and was moving jobs overseas in order to pay their workers lower wages.
“I don’t buy it one bit,” he said of Sloan’s explanation to the committee, on which Van Hollen sits.
He said Sloan hadn’t told him about the Frederick layoffs when they met in Washington recently.
