It would close its 638 Wells Fargo Financial stores, folding its lending business into its banks and closing out 3,800 jobs, Wells Fargo & Co. said on Thursday.

The company said in a statement that about 14,000 employees currently work at Wells Fargo Financial, which serves many low-income neighborhoods, offering mortgage and auto loans. However, less than 2 percent of the firm's real estate loans originated at Wells Fargo Financial stores in the first quarter.

David Kvamme, president of the subsidiary, said that the business is 100 years old, "But the economics of a separate Wells Fargo Financial channel are no longer viable."

It would cut 2,800 jobs within two months and 1,000 more within a year, Wells Fargo has said.

According to Kvamme, the company has identified jobs for "thousands" of employees displaced by the decision. (With Inputs from Agencies)