*

AI expected to drive some workforce reductions, Scharf

says

*

Asset cap removal allows Wells Fargo ( WFC ) to expand

By Lananh Nguyen and Nivedita Balu

NEW YORK/TORONTO, Nov 5 (Reuters) - Wells Fargo ( WFC )

CEO Charlie Scharf said on Wednesday he expects the U.S. bank's

workforce to decline further as it focuses on efficiency.

"It's likely we'll have less headcount as we look forward

... we'd like to do much of it through attrition as possible,"

Scharf said in an interview, noting the bank had 275,000

employees when he joined in 2019 and a little over 210,000

currently.

The U.S. Federal Reserve removed a $1.95 trillion asset cap

on Wells Fargo ( WFC ) in June, removing a major penalty for the bank's

fake-accounts scandal and opening the door to growth. At the

same time, the bank is focused on becoming more efficient and

cutting expenses.

"Headcount is the outcome of the conversations that we have

about 'we're way too inefficient, we're way too bureaucratic, we

have way too many processes inside the company that don't add

value,'" Scharf said.

AI TO DRIVE SOME JOB CUTS

Artificial intelligence could also drive some workforce

reductions.

"The opportunities that exist in AI are very significant,

and anyone who sits here today and says that they don't think

they'll have less headcount because of AI either doesn't know

what they're talking about or is just not being totally honest

about it," he said.

After regulators lifted the seven-year asset cap, the

fourth-largest U.S. lender has more freedom to expand through

acquisitions.

"We don't feel the pressure to do any M&A whatsoever ... We

have amazing opportunities in every one of our businesses, we

have scale in everything that we do," he said.

Still, Wells Fargo ( WFC ) could be interested in buying another

lender at "at the right price" in appealing geographies, he

said, without naming the areas. Payments and wealth management

are other areas in which the bank could add capacity, he said.

Scharf noted the bank's assets exceed $2 trillion, after the

cap was lifted.

"We now can grow our checking accounts, we can grow deposits

alongside that, we can grow the rest of our lending products ...

literally every one of the businesses we have plans to grow

utilize the balance sheet," he said.

The bank's stock jumped in October after its profit beat

expectations and it lifted its target for return on tangible

common equity to 17% to 18% over the medium term, compared with

earlier expectations of 15%.

Scharf has previously said he aims for Wells Fargo ( WFC ) to become

the top U.S. consumer and small business bank and wealth

manager, as well as a top-five U.S. investment bank.

Analysts and investors expect Wells Fargo ( WFC ) to move swiftly on

its expansion plans under Scharf, who took charge in 2019,

months after the bank's fake-accounts scandal drew public

outrage and billions of dollars in fines.

"We think (our future) is going to be extremely bright, with

or without something that's inorganic," he said.