Banks detailed plans to lay off employees and off-load branches in the first week of earnings calls.

As the COVID-19 recession dampens earnings and foreshadows significant loan losses, several U.S. banks said they are focused on cutting expenses. While discussing second-quarter results, U.S. banks detailed various ways to cut costs, including staff reductions, branch optimization and increased reliance on digital capabilities.

Following reports that San Francisco-based Wells Fargo & Co. plans to cut thousands of jobs, President and CEO Charles Scharf detailed how the company plans to cut about $10 billion from annual expenses on the company's second-quarter earnings call.

"We're trying to be very careful about making it clear that we are going forward and actively going to start to take actions to reduce expenses," he said on the July 14 call. The company expects to take several actions in the second half of the year, including eliminating unnecessary management layers, facilities and other duplicative platforms and processes.

"We have spans and layers at the company which are well beyond what I've seen at other places and makes us a very, very inefficient company," he said. "We have duplicative platforms, duplicative processes across the company."

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There are a "series" of employees who have been told that their jobs will be eliminated, but the company plans to let the initial stages of the COVID-19 crisis play out before laying off staff, he said on the call.

Charlotte, N.C.-based Truist Financial Corp. is also focused on cutting expenses by reducing both headcount and branch footprint. The company now projects it can realize 40% of the $1.6 billion in net cost saves from its merger-of-equals by the fourth quarter, up from previous guidance of 30%.

"We've got a ton of buildings as you might expect — duplicative buildings, some small, some large. We've got a major task force working on that," Chairman and CEO Kelly King said on the company's second-quarter earnings call. "We have a very aggressive personnel rationalization plan in process, and a good bit of that is already underway."

During the second quarter, the company's average full-time equivalent employee count declined by 735 from the first quarter. The bank also closed 42 branches in nonoverlapping markets.

Some regional players are also looking to shrink branch footprints to cut expenses. During the week ended July 17, Little Rock, Ark.-based Bank OZK announced it agreed to sell its two South Carolina branches to Indian Land, S.C.-based Sharonview FCU. The announcement comes about two weeks after Bank OZK announced it agreed to sell its two Alabama branches with separate purchase-and-assumption agreements. Analysts view the bank's exit from both states as moves to cut expenses.

Stephen Scouten, a managing director at Piper Sandler & Co., wrote in an email that the branch sales are a logical strategic decision as the company focuses more on markets with scale and density. The move frees up a little bit of capital and cuts some negligible expenses, he wrote.

"All banks trying to reduce costs to combat rate backdrop and challenging operating environment," Michael Rose, a managing director for Raymond James, wrote in an email.

Providence, R.I.-based Citizens Financial Group Inc. hopes to take advantage of potential cost savings related to the recent surge of digital adoption due to social distancing measures.

"We think that offers some meaningful upside in terms of efficiencies across really distribution, operations and technology," Chairman and CEO Bruce Van Saun said on the company's second-quarter earnings call. "There's a number of things that we're looking at that I think offer some big potential for savings down the road."

Pittsburgh-based PNC Financial Services Group Inc. could also close more branches in light of the recent digital adoption acceleration, Chairman, President and CEO William Demchak said on the company's second-quarter earnings call.

"But what's clear is consumer behavior has changed, and my belief is, in a lot of ways, it's changed permanently with this adoption to digital," Demchak said. "So, we'll have to adjust the way we serve our clients, and it is likely that that will mean less physical space."