Wells Fargo Trims Small-Business Card-Processing Unit

By Emily Glazer 

Wells Fargo & Co. laid off about 50 employees as it continues to restructure its credit-card processing business geared toward small-business customers, a bank spokeswoman said.

The bank eliminated the positions Monday, people familiar with the matter said. The affected employees were salespeople in the part of Wells Fargo Merchant Services LLC focusing on retail bank customers that are typically small businesses, they added.

Wells Fargo spokeswoman Sara Hassell added in a statement the bank is reducing the number of employees in the business "to better align with current volumes." She said Wells Fargo is committed to finding other jobs within the company for those laid off where possible.

Ms. Hassell also said the layoffs didn't impact other parts of Wells Fargo Merchant Services that work with larger customers elsewhere in the bank.

Wells Fargo offers merchant services in partnership with payment-processor First Data Corp., which leases or sells point-of-sale equipment to retailers and other businesses. Wells Fargo collects a fee for transaction processing and a commission from First Data on equipment leases and sales.

Bank of America Corp.'s merchant services business, which also operates in conjunction with First Data, laid off around 250 employees in September as part of a digital push.

Wells Fargo's Ms. Hassell said the bank's layoffs were unrelated to a coming 2018 rollout of a mobile app geared toward small-business merchant-services customers.

Though the layoffs are happening while the business is going through changes, it is just a drop in the bucket for the bank overall. Wells Fargo had 268,000 employees as of Sept. 30, down 1% from 270,600 the prior quarter and down slightly from the year-earlier period, according to the bank.

Wells Fargo, which has been dealing with a sales-practice scandal that erupted more than a year ago in its retail bank unit, also has been working to restructure its merchant-services business. The Wall Street Journal reported in April that it overhauled the business after an internal probe found some employees falsely reported customers' sales and pushed small firms into costly contracts they didn't understand.

The bank previously fired at least two dozen employees for those and related matters and reduced the incentives for using aggressive sales tactics. Wells Fargo said in a statement at the time it had taken "significant steps" over the past several years to strengthen the business, including management changes.

Write to Emily Glazer at [e-mail]

(END) Dow Jones Newswires

November 14, 2017 14:48 ET (19:48 GMT)

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