Wells Fargo lays off another 107 workers in Des Moines metro as mortgage market cools

·2 min read

Wells Fargo & Co. announced another round of layoffs in the Des Moines metro last week, more than doubling the number of workers at the banking giant who have lost jobs in central Iowa so far this year.

According to an Iowa Workforce Development notice, Wells Fargo laid off 107 employees in Ankeny, Des Moines and West Des Moines on Thursday, bringing the total number of jobs cut since April 21 to 197. Company spokesperson Elise Corbett said Wells Fargo continues to lay off employees because of a downturn in the housing market.

Wells Fargo's home mortgage division is based in Des Moines, and the company is the metro's largest private employer, with about 13,000 workers. The Federal Reserve's recent interest rates hikes to slow inflation have decreased the number of Americans applying for mortgages or refinancing past loans.

More: Rising interest rates could add hundreds to mortgage bills. Here are 5 tips to keep bills low.

As of Thursday, the average rate for a U.S. 30-year fixed-rate mortgage was 5.8%, according to Freddie Mac. That's up from 3.1% at the beginning of the year and is the highest in the United States since November 2008.

With the cost to borrow up, the number of people buying homes in the U.S. declined at the start of this year. In their most recent quarterly report, Wells Fargo executives told investors that the number of customers originating mortgages from January through March was down 27% compared to the same period in 2021.

More: A double whammy for consumers: Home and auto insurance rates are set to jump in tandem

The company reported a quarterly profit of $3.67 billion, down from $4.64 billion the year before. Since Wells Fargo released the report, the company's stock price has dropped about 19% to $39.40 a share.

The latest Mortgage Bankers Association forecast projects 2.41 billion mortgage originations for 2022, down 40% from last year. The industry association projects a 69% drop in refinances.

More: With mortgage costs on the rise, is it time to consider buying a tiny home instead?

"The employees affected by these changes have each been an essential part of our success," Corbett, the Wells Fargo spokesperson, said in a statement Tuesday. "We are carrying out displacements in a transparent and thoughtful manner and providing assistance, such as severance and career counseling."

She said 35% of "those impacted in home lending so far this year" have taken jobs in other parts of the company. Wells Fargo executives will next share the company's performance from April through June on July 15.

Tyler Jett covers jobs and the economy for the Des Moines Register. Reach him at tjett@registermedia.com, 515-284-8215, or on Twitter at @LetsJett.

This article originally appeared on Des Moines Register: Wells Fargo lays off 107 more workers in Des Moines metro