Riddle of the day: When are layoffs a sign of economic recovery?

When they come in the collection department.

So says Wells Fargo. The bank is cutting 193 auto loan collection positions in Pennsylvania; it made a similar move in Kansas City in February. The reason: More consumers are current on their loan payments.

"We are seeing an improved credit environment, more customers are making their payments on time, customers are paying off their debts, and there is a decreased need for team members in collections," said Wells Fargo spokesman Jim Baum in a published report.

For instance, 30-day delinquencies in Wells Fargo’s indirect auto portfolio fell to 1.74% at yearend 2010, from 2.12% at yearend 2009. Net chargeoffs dropped more than half, to 1.13% from 2.31% in the same period.

Meanwhile, Wells Fargo has been reducing headcount since last summer, when it announced plans to lay off 3,800 workers in the next 12 months as it closed Wells Fargo Financial stores across the country. The bank has been working to help laid-off employees apply for other positions within the bank or find new jobs elsewhere, Baum said.