Wells Fargo to cut 10% of jobs
NEW YORK — Wells Fargo plans to cut up to 10 percent of its workforce over the next three years, the bank announced Thursday, which will result in thousands of job losses for employees of the nation's third-largest bank.
CEO Tim Sloan made the announcement to employees. The bank currently employs roughly 265,000 workers, and plans to cut its headcount through both attrition and layoffs.
Wells Fargo is the largest bank operating in South Carolina based on deposits and branches.
It has been under multiple clouds of scandal starting in 2015 when it admitted its employees opened millions of fake bank accounts for customers in order to meet unrealistic sales goals. Wells has since tried to make amends with the public and its customers, but every time it seems like Wells has put one scandal behind it, another pops up in its place. Since that admission Wells has admitted to other scandals, including selling auto insurance to borrowers who did not need it and selling high-cost wealth management products to customers who also did not need them.
State and federal regulators, who have clearly lost patience with Wells' pledge of making amends, have put restrictions on Wells' business and have fined the bank more than $1.2 billion in penalties for its bad behavior. The Federal Reserve went further earlier this year, forcing Wells to not grow any larger from its current size until it says otherwise. The Fed also mandated Wells replace some of its board of directors.
IRS to update its W-4 form
WASHINGTON — The IRS will soon update the W-4 form used by employees at their workplace to better reflect the recent changes to federal tax law.
The U.S. Treasury said Thursday that the IRS will update the form in the coming weeks for use for the 2019 tax year. That version is expected to be fairly similar to the W-4 currently in use. A more significant change will come in 2020 with the aim of making the withholding system more accurate and transparent to employees.
The IRS released a draft version of the new W-4 form in June for public comment. But it faced criticism, including from the American Institute of CPAs, which said the draft made some processes more complex and created privacy concerns.
Treasury Secretary Steven Mnuchin said that the IRS will continue working closely with the tax and payroll community as it makes further changes.
Employees fill out a W-4 form so that their employer can withhold the correct federal income tax from their pay. The IRS urged people to update their W-4s after the new tax law was approved to ensure they were having the proper amount withheld.
US home sales were flat in August
WASHINGTON — U.S. sales of existing homes were unchanged in August, as a shortage of houses priced at less than $250,000 — a level considered to be affordable for the middle class — has become a drag on the real estate market.
The National Association of Realtors says homes sold last month at a seasonally adjusted annual pace of 5.34 million. Existing home sales have fallen 1.5 percent during the past 12 months.
Price gains are moderating, and the total number of sales listings is increasing. But the sales momentum is increasingly concentrated on homes worth more than $500,000, while sales of homes worth less than $250,000 have tumbled over the past year.
The median sales price in July increased 4.6 percent from a year ago to $264,800.
AT&T: Feds failed to show price hikes
WASHINGTON — Defending court approval of its huge merger with Time Warner, AT&T is arguing the Trump Justice Department failed to show that the merger will raise wholesale prices for pay-TV programming and for consumers.
AT&T's $81 billion takeover of Time Warner, completed this spring soon after a federal judge approved it, is under challenge by the government in a case before the U.S. Court of Appeals in Washington. The phone and pay-TV giant submitted its filing in the landmark competition case Thursday.
AT&T, the biggest pay-TV provider in the U.S., asserted the merger will save it money on content from Time Warner's Turner Broadcasting, enabling it cut charges to its DirecTV customers by at least $78 million a year.
Mortgage rates in US rise again
WASHINGTON — Long-term U.S. mortgage rates are up for the fourth consecutive week, with the key 30-year rate reaching its highest level since May.
Costs for would-be homebuyers continue to climb. Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year, fixed-rate mortgages jumped to 4.65 percent, from 4.60 percent last week. The average rate has increased from 3.83 percent a year ago.
The average rate on 15-year, fixed-rate loans rose to 4.11 percent this week from 4.06 percent last week.
The primary factors driving rates higher include the strong economy, trade tensions between the U.S. and other countries, and the U.S. government stepping up sales of its debt, according to Freddie Mac chief economist Sam Khater.
Gap steps into men's athleisure game
NEW YORK — The Gap is stepping in to the men's athleisure wear game, which has exploded in recent years.
The clothes are intended to be formal enough to wear to the office, at least on casual Friday, and suitable for the gym or yoga studio directly afterward.
Gap's Hill City brand will roll out in mid-October at hillcity.com and will be on display at 50 of the clothing chain's Athleta stores, which sell technical, athletic clothing for women.
The Gap Inc. is struggling with weak sales and follows others in recognizing a sustained demand for work-to-yoga studio clothing.
Last month VF Corp., which makes Wrangler and Lee jeans, said it would break off its denim division to focus on its faster-growing brands like The North Face, Timberland, Altra, Icebreaker and Williamson-Dickie.
Under Armour cuts jobs in streamlining
BALTIMORE — Under Armour will cut about 400 jobs, part of a restructuring that the sports gear maker announced earlier this year.
The Baltimore company actually began a streamlining last year after explosive sales growth tailed off. That cooling was experienced by Nike as well, with active lifestyle brands like Lululemon luring more consumer dollars while those selling gear for organized sports lost some momentum.
The 400 jobs amount to about 3 percent of the people that Under Armour employs globally. The most recent round of cuts will be completed by the end of March, the company said Thursday.
Under Armour now anticipates restructuring-related charges this year of between about $200 million and $220 million. It previously projected restructuring charges between $190 million to $210 million.
Excluding those costs, Under Armour Inc. expects full-year profits of between 16 and 19 cents per share. Its prior outlook was for 14 to 19 cents per share. Analysts polled by FactSet expect earnings of 16 cents per share.
Darden's 1Q profit jumps on sales increase
NEW YORK — Darden Restaurants Inc. reported a boost in first-quarter profit on higher sales at its key Olive Garden and LongHorn Steakhouse restaurants, while raising its outlook for the year.
The Orlando-based company also saw a sharp decline in tax costs, helping to boost the bottom line and beat Wall Street expectations.
The chain restaurant company's profit rose 40 percent to $166.2 million, or $1.32 per share. Earnings, adjusted to account for discontinued operations, were $1.34 per share. That topped Wall Street expectations by 11 cents.
Sales rose 6.5 percent to $2.06 billion, also beating forecasts.
Overall same-restaurant sales rose 3.3 percent. Sales at Olive Garden restaurants open at least a year rose 5.3 percent and LongHorn Steakhouse restaurants open at least rose 3.1 percent in the quarter.
Sales also increased at the company's other operations, including Eddie V's, The Capital Grille, Yard House, and Bahama Breeze.
Aston Martin valued at $6.7B in IPO
LONDON — Aston Martin Lagonda, the maker of James Bond's favorite sports car, plans to raise as much as $1.67 billion when it sells shares to investors for the first time.
The luxury carmaker says it will sell a 25 percent stake, valuing the company at as much as $6.7 billion. Aston Martin said Thursday the exact price would be set around Oct. 3.
The company says Daimler will remain a shareholder and won't reduce its 4.9 percent stake for 12 months.
Aston Martin CEO Andy Palmer says the share sale "will provide investors with a fitting opportunity to participate in our future success."
The carmaker was founded in London in 1913 and is headquartered in Gaydon.