Charles Schwab to Cut 1,880 Jobs
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SAN JOSE, Calif. (AP) _ Charles Schwab Corp. said Tuesday that it will cut about 10 percent of its work force, or roughly 1,880 jobs, as the discount and online brokerage continues to struggle with weak trading volumes.
In August, the San Francisco-based company hinted that it would be making cuts but provided no numbers. At that time, the company had about 18,800 employees.
It was not immediately known what business units would be targeted by the layoffs, which are expected to be completed by the end of November, said Greg Gable, a Schwab spokesman.
Schwab also said Tuesday that it expects to earn 7 cents to 8 cents per share in the third quarter. Analysts surveyed by Thomson First Call were expecting an average of 8 cents per share.
Schwab reported that clients made an average of 117,500 daily trades in August, which is up 3 percent from 2001 but down 25 percent from July 2002. The figure excludes mutual funds trades.
The company also said new assets brought by new and existing clients in August totaled $4.4 billion.
``While trading volume is down ... we’re still seeing positive flows of assets into the company,″ Gable said. ``Given current environmental and global issues, people are not as confident in investing and trading right now.″
Besides the job cuts, Schwab also said last month it is reducing spending on professional services, development projects and advertising. It hopes to save more than $225 million annually.
Shares of Schwab were down 44 cents, or 4.5 percent, to $9.33 each in Tuesday trading on the New York Stock Exchange.
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Charles Schwab: http://www.schwab.com