On Wednesday, Wells Fargo & Co. told high-earning employees it would stop matching contributions to their 401(k) plans. By Friday, the bank reversed course.
The about-face followed a swift backlash from affected employees, who earn more than $250,000 a year, according to people with knowledge of the situation.
The measure was part of a larger set of changes the San Francisco-based firm rolled out this week to put “greater emphasis on how we support our lower-paid employees through our compensation and benefits program,” company spokesperson Beth Richek said in a statement. “After additional review and consideration, we have decided to continue offering the 6% company matching contribution to all 401(k) plan eligible employees.”
The drama unfolded as Wells Fargo undertakes a years-long cost-cutting initiative under Chief Executive Officer Charlie Scharf, who took over last October. He has repeatedly lamented the firm’s spending and pledged to eventually shave $10 billion in annual expenses. The company, which employed 274,900 people at the end of September, has embarked on workforce reductions that could ultimately number in the tens of thousands.
This article was provided by Bloomberg News.