Wells Fargo & Co.’s announcement yesterday that it will restructure its Wells Fargo Financial Consumer Division sent shock waves through Greater Des Moines’ business community.

The company plans to close its 638 Wells Fargo Financial stores across the country, which will result in eliminating 1,000 positions at its downtown headquarters during the next 12 months. Including the retail stores that will close locally, Wells Fargo Financial employs approximately 3,800 people in Greater Des Moines, officials said.

Nationwide, Wells Fargo Financial employs approximately 14,000 people. Of those, 2,800 positions will be eliminated in the next 60 days as the retail offices are closed. The remainder of Wells Fargo Financial’s employees will be reassigned to other Wells Fargo business units as loan products are shifted to other divisions, the company said.

Wells Fargo’s 2008 merger with Wachovia Corp. eliminated the need for a separate network of Wells Fargo Financial offices, said David Kvamme, Wells Fargo Financial’s president.

Though the consumer finance stores have operated as an independent sales channel for more than 100 years, “the economics of a separate Wells Fargo Financial channel are no longer viable, especially now that our customers have access to the largest banking and mortgage store network in the United States,” Kvamme said in a press release.

“We know that this decision will be extremely difficult for those dedicated team members and their families who will be affected,” he said.

In 2003, the company pledged to create at least 1,000 additional Wells Fargo Financial jobs downtown as one of the conditions for receiving a $10 million economic development grant from the state of Iowa for construction of its Wells Fargo Home Mortgage headquarters in West Des Moines. Wells Fargo expanded its Financial Division’s headquarters in 2006 with the construction of a second major office building at 801 Walnut St.

Glenn Lyons, president and CEO of the Downtown Community Alliance, said he had no forewarning of the restructuring, which could reduce the downtown work force by as many as 1,000 employees.

“I was surprised when I read it, but when you think about what’s happened in the subprime market, I suppose it’s not surprising,” he said.

“The larger loss of positions will happen in 2011, and they’re looking at redeployments,” he said. “What happens to the downtown spaces will play out over time. They haven’t announced they will be leaving any space, but they have intimated they have leased spaces around the city. I’m hoping that as the year progresses Wells Fargo will be able to find places for their people and resolve space issues. I don’t want to panic when things like this happen, because things always work out differently.”