Wells Fargo & Co. Chief Executive Officer Charlie Scharf said artificial intelligence poses a significant opportunity to improve efficiencies and has the potential to influence companies’ headcount decisions.

The San Francisco-based lender has rolled out generative-AI tools to its engineers, making it 30% to 35% more efficient for them to write code, Scharf said at a Goldman Sachs Group Inc. conference Tuesday. That hasn’t resulted in job cuts yet, but the teams are able to get a lot more done, he said.

“We’re not as efficient as we should be without the benefits of AI,” Scharf said.

There are many other areas where Wells Fargo will be able to figure out how to use large-language models and agentic AI to do things differently with less people, Scharf said. He cited compliance and legal matters, call-center work, the production of pitch books in the firm’s investment-banking division and writing credit memos within its commercial bank.

As Wells Fargo continues to lower its cost base, it will likely post more severance expenses in the fourth quarter than in the first part of the year, Scharf said. The company has been shrinking headcount for years in a bid to increase efficiency, and had more than 210,000 employees at the end of September.

Last month, Wells Fargo announced a newly created role for AI oversight, appointing Saul Van Beurden, who has been leading its consumer-banking unit, to also lead firm-wide adoption of AI. The company said it has been training more than 90,000 employees and deploying AI tools to 180,000-plus desktops.

Read More: Wells Fargo Consumer-Banking Head Van Beurden Adds AI Oversight

With Wells Fargo no longer constrained by an asset cap that once limited its ability to grow, the bank has been aggressively pursuing growth in certain areas, such as increasing marketing investments to chase consumer deposits. The company doesn’t feel pressure to make acquisitions, but could look at potential targets as regulators become more lenient in approving deals, Scharf said.

“We would think about it, but we’d have to have very strong financial returns make us strategically more interesting for investors, and not get in the way of the organic opportunities that we have,” Scharf said.

— By Yizhu Wang (Bloomberg News)