Des Moines Register: Axne questions whether Wells Fargo outsourced local jobs

March 13, 2019
In The News

Kevin Hardy, Des Moines Register

March 13, 2019

While Wells Fargo blamed declining workload when it announced hundreds of local layoffs late last year, U.S. Rep. Cindy Axne said the company appeared to be shipping American jobs overseas.

Axne, D-Iowa, questioned Wells Fargo CEO Tim Sloan during his testimony Tuesday in front of the U.S. House Financial Services Committee. Sloan endured bipartisan criticism for the bank's handling of multiple scandals dating back to the 2016 revelation that the company opened 3.5 million bank accounts without customer authorization to meet aggressive sales goals.

The bank announced in November that it would eliminate 400 jobs in central Iowa as part of a national effort to reduce employment by as many as 26,500 jobs over three years.

But Axne said her office was contacted by a laid-off worker in Des Moines who was told on multiple occasions that her job was being moved to India. That employee requested funding from the Trade Adjustment Assistance Program, a federal aid plan for workers who lose work or wages as a result of increased imports. In her petition for aid, the employee said Wells Fargo mortgage claims employees traveled to India to train their replacements.

"Are these recent layoffs really just you moving jobs overseas?" Axne asked the CEO.

"No," Sloan answered, "that's incorrect."

Axne noted that Wells Fargo continues to add jobs in other countries even as it cuts U.S. workers. She pointed to reports that the company has added more than 10,000 employees in India and the Philippines with plans to hire as many as 7,000 more Filipino workers.

"Can we expect that more of your planned layoffs are going to be jobs moved overseas?" she asked during the hearing.

"No, I don't believe that's going to be the case," Sloan said. He said the bank has 20,000 job openings — 90 percent of which are located in the United States.

With about 14,000 workers, Wells Fargo is the single largest private employer in the Des Moines metro area. Iowa's capital city is home to the bank's home-mortgage division and the company's third-largest concentration of workers, behind only Charlotte and Minneapolis-St. Paul.

Axne, who said she wants to see the bank keep a steady employment base in Des Moines, was not satisfied with Sloan's answers.

"We're still laying people off in our own backyard in this country when we’re shipping thousands of jobs over to another country," she said in an interview with the Des Moines Register. "I think we need to keep the jobs here."

She said she will investigate further to find out if the company has allowed laid-off workers to receive support under the federal Trade Adjustment Assistance Program, which provides financial support and job training assistance.

In Tuesday's hearing, Axne pointed to a New York Times story that found continued pressure on employees to squeeze money out of customers. The story quoted a Des Moines worker who said a "general fear of retaliation for speaking out" still exists.

Sloan told the committee the story was "patently not true" and said retaliation has no place at Wells Fargo.


Axne told the Register she's unsure whether the bank needs to be broken up. But she said she will continue to investigate the 400 layoffs in Des Moines and whether the bank has provided the proper assistance for those employees.

More broadly, she said Sloan's testimony that the bank had turned things around and improved its culture belied reports from front-line workers.

"It leads me to believe that we’re not hearing the full truth with this," she said.

The Associated Press contributed to this story.

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