July 31 (UPI) -- Wells Fargo's community banking division will cut 70 senior executive positions amid weaker profits months facing fines for the creation of fake customer accounts, the company announced Friday.
Mary Mack, head of Wells Fargo & Co., the retail bank division of the banking conglomerate, said the number of regional and area presidents will be reduced to 91, Bloomberg reported.
"Change is hard, yet change is necessary to make sure we are well positioned for the future," Mack wrote in a company memo to staff. "In order to truly be better, we must put the right structure in place."
The employees affected by the cuts will continue working at the company for 60 days until further details are ironed out. Some will retire with benefits, while others may continue at Wells Fargo in different positions.
In September, federal regulators fined Wells Fargo $185 million for illegally opening fake deposit and credit card accounts under the names of real customers. The fine included $100 million paid to the Consumer Financial Protection Bureau, $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles.
"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," said CFPB Director Richard Cordray said at the time. "Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed."
Since that scandal, Wells Fargo & Co. has generated low profits, leading to the widespread job cuts.
Last week, the company took another public relations hit when it announced that it had charged 500,000 people for auto insurance they didn't need.