Washington – A CNN article titled, “Why Wells Fargo could be one of tax reform's big winners,” notes that big banks, such as Wells Fargo, are set to be the biggest winners from the disastrous tax bill passed by Congress last week:
“Some of Wall Street's largest banks stand to win big from the tax bill now hurtling its way towards the President's desk — but among them, Wells Fargo will make out the best,” according to an analysis by the equity research team at Goldman Sachs.
PUTTING PROFITS IN
POCKETS OF INVESTORS
The CNN article also highlighted that Wells Fargo CEO Tim Sloan plans to put these profits into the pockets of investors, rather than re-invest in American communities, consumers, and workers who have been harmed by Wells Fargo’s business practices and its continued offshoring of American call center jobs.
“Is it our goal to increase return to our shareholders and do we have an excess amount of capital?” Sloan asked. “The answer to both is, yes … So our expectation should be that we will continue to increase our dividend and our share buybacks next year and the year after that and the year after that."
LAYOFFS AND CALL CENTERS
In recent months, Wells Fargo announced layoffs at call centers in Bethlehem, PA (eliminating 460 jobs), Fort Mill, SC (eliminating 120 jobs), and Vancouver, WA (eliminating 72 jobs).
While the company blamed this new round of American worker layoffs on new technologies and changes in the mortgage servicing marketplace, Wells Fargo failed to mention its significant and growing presence of call centers overseas that are servicing the U.S. marketplace.
In the Philippines, the Wells Fargo presence has grown from fewer than 100 call center employees in 2011 to more than 4,000 employees today, with plans to expand into a new facility in the Philippines that will house more than 7,000 call center workers servicing the American marketplace.
And during a Senate Banking Committee hearing held earlier this fall, Wells Fargo CEO Sloan admitted during questioning from Senator Joe Donnelly (D-IN) that recent rounds of layoffs of hundreds of American workers at Wells Fargo call centers were directly related to the company’s increased hiring of call center workers in the Philippines – an admission at odds with the company’s stated claims for these layoffs.
Unfortunately, among the many disturbing provisions of the tax legislation are components that would incentivize and reward companies such as Wells Fargo who practice offshoring.
BUSINESS MODEL HAS NOT CHANGED
A recent letter sent by Senator Sherrod Brown (D-OH) and Senator Donnelly (D-IN) to Wells Fargo CEO Sloan expressed concern about Wells Fargo’s practice of offshoring call center jobs from American communities to the Philippines and called on the company to “reinvest in American call center workers and their communities.” Citing that “Wells Fargo's pattern of abuse against consumers has been well-documented over the last year,” the Senators’ letter noted that the company’s offshoring practices indicate that its business model has not changed.
MISPLACED PRIORITIES OF TAX BILL
According to Shane Larson, legislative director for the Communications Workers of America (CWA), “The fact that the Republicans’ tax bill will reward companies with business and offshoring practices like Wells Fargo embodies the wildly misplaced priorities of this disastrous piece of legislation.
“Despite the windfall that the tax bill is likely to generate for the company, and despite its ongoing layoffs of American call center workers, Wells Fargo is not planning on changing its practices or reinvesting in American jobs and American communities,” Larson said.
“Congress should be working to pass legislation such as the federal call center bill to rein in offshoring and hold companies like Wells Fargo accountable – not efforts that reward and incentivize bad actor companies to maintain their anti-American worker practices.”
The U.S. Call Center Worker and Consumer Protection Act, introduced in both the U.S. House and Senate, would require that U.S. callers be told the location of the call center to which they are speaking; would offer callers the opportunity to be connected to a U.S. based center if preferred; and would make U.S. companies that off-shore their call center jobs from the U.S. ineligible for certain federal grants and taxpayer-funded loans.