Wells Fargo Commits to Try and Retain Wachovia Staff

By Scot Herrick | Cube Rules Commentary

Oct 24

Call me totally skeptical. But, I hope this is true. Wells Fargo, in their purchase of Wachovia, is offering a different model of “layoff first, manage later” that I have consistently seen in my reviews of mergers.

The chief executive of Wells Fargo made no promises about job losses Wednesday when he addressed a crowd of Wachovia Corp. employees, but said he would make every effort to retain workers amid the banks’ combination.

“As we move forward, my job will be to help all of you stay with the company,” John Stumpf told employees who packed the Wachovia Atrium in Charlotte. He said the company would work to “retain and retrain” workers in positions duplicated through the merger.

Notice the very short commentary on “retain and retrain workers in positions duplicated through the merger.”

Now, I have no unique inside sources in these companies, but could offer a plausible method of implementing this approach. Companies usually lose 10% of their employees through attrition every year. Especially large financial companies. Especially lately. So moving these “duplicated positions” into other positions as attrition happens could very easily work. Plus, it would make sense to retain the best and the brightest from both companies instead of driving them out of one company.

Anyone working at Wells Fargo or Wachovia seen evidence of this retain and retrain approach?

  • Mary says:

    Wells Fargo has a retain and retrain policy or program? I don’t think so my husband is going through that now and every position he has applied for that he meets the minimum requirements or most of the requirements he has been turned down for, and he has been with Wells Fargo for 12 years now. He has had very good reviews every year has even won awards for best practice suggestions. He is still being let go. So I haven’t seen any evidence of this retain or retrain program.

  • Scot says:

    @Mary – Hence, “call me skeptical.”

    It just continues to amaze me that the only answer to whatever is hurting corporate America is a layoff. So much for “management.”

  • Pratik says:

    I really hope the merge goes smoothly, but then again this is my second merge and this one just gives me a bad feeling. I currently work for Wachovia and former World Savings employee.

  • Scot says:

    @Pratik – Thanks for the comment. The problem with these financial mergers right now is that everything is going bad fast. And continues to go bad. Consequently, you get 10,000 layoffs at the purchased company…and another 15,000 at the buying company. In a “normal” environment, you’d have significant layoffs of duplicate functions at the purchased company (like big layoffs at WaMu) and few at JPMorgan Chase.

    But, it’s not working out that way. In the financial market, no one is safe. So save your money, make sure you continue to perform on the job and watch what happens around you.

  • Chris says:

    In 1998, I was in a “duplicated position” when Norwest acquired Wells Fargo. With 12 years at the company, this was a disconcerting and unnerving experience. I was soon offered another postition that I did not know a lot about. I took it, because I wanted to stay with this company. A decade later, my work is very challenging and rewarding and I like Wells Fargo even more.

    We are now in the midst of an economic environment many of us have never seen before and no one can predict the future. It always pays to be prepared for all possibilities, but even big companies can and do learn that you only succeed in the long run by doing right by all of your stakeholders, and employees are at the top of the list.

    • Scot says:

      Chris, it is rare that companies do this any more. I’m glad to see they are making the effort here, although the point of view on that varies.

      What I am most happy about, however, is that you took the risk to do the change hoping that it would lead you to the right next step for your career. Perhaps it might not have worked out, but the willingness to take the risk is important all by itself.

  • Stephanie says:

    I currently work for Wachovia and as someone that doesn’t have anything to do with the management aspect of the company, I can confidently say that no one is at all at ease with their position. Sure the VP’s are edgy but I’ve listened to more than one of my co-worker’s talk about updating their resume and putting it out there.

    We haven’t had any reassurances any of us actually feel confident about so….it sort of feels as though we’re rats going down with the ship.

    • Scot says:

      I don’t know the specific numbers coming out of Wells; just the profit numbers…

      This, however, is a perfect example of why it is important to compare the Corporate Speak with what others say about the chances of this happening. Setting up a feed with all news about Wells Fargo (using their stock symbol will do it) will provide all sorts of news about Wells that doesn’t show up in normal corporate communications (including bank robberies!).

      We don’t believe what they say — we watch what they do. If it matches, it builds trust. If it doesn’t, it doesn’t. I was just very surprised that a corporate group would publicly say they were going to try and retain when the vast corporate history (not just Wells) says this would not be the case.

      Thanks for the comment — let us know how it goes.

  • Seleste says:

    I have worked for Wells Fargo for over 30 years. I have gone through many mergers over the past 23 years and I can honestly say, that this is the first mergers that makes me uneasy. Let’s be real. They will not be able to maintain alot of employees, during the process of completing the merger.

    • Scot Herrick says:

      @ Seleste — I don’t know how many people finally laid off due to the merger, but you are correct that mergers always carry risk of layoffs. Much better to always be ready for a layoff; by the time the merger hits it is too late to build up your savings and get your networking in place.

  • Andrew says:

    I worked for Wachovia prior to the merger and was given several career options and actually ended up receiving a raise and a promotion during integration in my state this year. In fact the only people who were displaced that I'm aware of were some fairly high ranking execs and 2 regional managers. (who all received very generous severance packages) I truly believe that Wells Fargo wants to do what's best for people, their customers and their team members alike.

  • KatherineRBrownton says:

    Wells Fargo & Company is a specialized financial services company based in San Francisco, and is a provider of insurance, wells fargo bank locations mortgage, investments, banking, consumer finance catering to more than 23 million customers across the United States and a few other international countries. Wells Fargo’s distribution channels include 6,200 stores, the internet, and several other outlets.Being listed as one of the United States’ top-40 largest private employers, Wells Fargo has $500 billion in assets, and employs about 154,000 people. In 2006, Wells Fargo was ranked fifth in assets and fourth in market value of stock, and is the no.1 prime home-equity lender in Wells Fargo’s banking states.

  • Scot Herrick says:

    Nothing of which has anything to do with this post, but it is a good background on Wells…who is now laying more people off.

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