The top US discount and online brokerage Charles Schwab said today it was cutting up to 2,400 employees, or 11 per cent of its work force, as it continues to grapple with weak customer trading levels.
Schwab, the latest in a long line of financial services firms laying off staff, said customer trading activity is down 50 per cent from the beginning of the year. The San Francisco-based company indicated it would be forced to cut jobs earlier this month and already made significant cuts this year.
The broker which began 2001 with 26,700 workers, said it expects its employee staffing levels to be down 25 per cent by the end of the year. It said it will cut between 2,000 and 2,400 full-time staffers and said it had about 22,300 employees at the end of July.
A weak stock market is wiping away profits at some of the leading financial services companies in the US. Morgan Stanley, Citigroup and Merrill Lynch have all let go of staff this year to cope with the weak conditions.
Online and discount brokerages such as Schwab and rivals Ameritrade Holding and TD Waterhouse have been particularly hard-hit because of their reliance on small retail investors.
This group watched in horror as stock markets continue to slide. The Nasdaq which includes some of the most widely held US companies is down more than 50 per cent since the end of last August.
Schwab shares closed at $12.20 in yesterday’s trading on the New York Stock Exchange, well below their 52-week high of $39.50 and just above a yearly low of $12.12.