Schwab to lay off up to 3,400

By Maria Trombly

March 23, 2001 12:00 PM ET

Computerworld - Citing overcapacity for processing online trading orders in light of the recent stock market sell-off, Charles Schwab & Co. yesterday announced plans for major job cuts amounting to 3,400, or 11% to 13%, of its workforce. The bulk of the cuts will come in the second quarter.

"It's been a difficult decision," said Charles Schwab, chairman and co-CEO at the San Francisco-based discount brokerage, in a teleconference yesterday. But according to Schwab, the markets have moved from a position of "tremendous exuberance" early last year into a "somewhat recessionary period" today.

Schwab said he doesn't expect confidence levels to bounce back for at least another year. As a result, he added, the company now has excess capacity for handling the amount of transactions being processed by its customers.

The fact that the stock market bubble has burst may even be better for Schwab in the long term, one executive said. "We'll have a much better business model without having to carry the kind of standby capacity to handle volumes that triple in a matter of a week," said company president and co-CEO David Pottruck.

Schwab spokeswoman Jennifer Hallahan said the company won't make final determinations as to which departments and locations will see the cuts for another 30 to 45 days.

Larry Tabb, an analyst at Needham, Mass.-based TowerGroup, said Schwab has been very heavily IT-oriented during the past three to four years. The company is now reorienting toward branches, serving high-net-worth clients and providing people with more personalized service. That doesn't bode well for IT.

"I would say that this layoff will hit the technology group pretty hard," Tabb said.

Related stories:

Schwab, CSFBdirect to cut jobs, March 15, 2001

SEC staff: Online brokerages can do better, Jan. 31, 2001

Ameritrade, J.P. Morgan to cut workers, Jan. 8, 2001

Recommend Digg Twitter ShareThis

Email Print Send Feedback Reprints

Additional Resources

POLL RESULTS

Leading IT Pros Weigh In on Top IT Issues

Accelerate your knowledge of the IT world you inhabit by viewing the results of a series of polls taken by your IT peers. These polls of 100+ IT professionals each are available for full viewing. They cover key topics such as virtualization, processor performance, green IT, cloud computing and many others. Be a part of the buzz.

WHITE PAPER

For Best Results, Think Beyond the Box

Technology is complex. Keeping it running productively shouldn't be. To that end, you want to minimize the number of solutions needed in-house to simplify operations, maintenance, and support. Kodak offers a best-practices model. One company provides support for both scanner and software, for fast problem resolution without vendor finger-pointing. Download now!

WHITE PAPER

Accelerating the Path to Demand Intelligence with a Demand Signal Repository

Utilizing demand intelligence improves the precision of pricing, product assortments, channel/store placement, and promotion, which are all essential for sustainable revenue management performance. Learn more, download this free whitepaper today.

White Papers & Webcasts

Natural User Interface for Enterprise Applications
Learn how a revolutionary user interface can make a complex enterprise application so intuitive even casual users can jump right in....

Usability Is Everything
Learn what sets Workday's HR and Payroll solutions apart from the competition....

A Truly Global HCM System
Learn about a system built with advanced object-oriented technology that support multi-national requirements and costs less to implement, maintain and upgrade....

The Value of Real SaaS at Workday
Cost savings, speed to value, and innovation brought to the enterprise by Workday's software-as-a-service solutions for HR and Payroll....

Craft a Strategy to Lower Your Total Cost of Ownership
Get the tools to build a business case to assess the total cost of ownership of your HR technology footprint....

SaaS at Flextronics, Inc.
Dave Smoley, CIO of Flextronics, discusses the real value of software-as-a-service and why he chose Workday for his HR solution....

Navigating the Economic Morass
Need help making your way through today's volatile job market? In this Learn-Fast Guide, you'll learn how and where to look for your...

Why Compliance Pays
This OnDemand webcast explores the relationship that firms with best compliance records have higher revenue, greater customer retention, lower financial losses from data...

Accelerate SSL Encrypted Applications
The amount of SSL traffic is growing in the enterprise. Because it is encrypted, it cannot be properly controlled and accelerated. Blue Coat...

Agile Enterprise Content Management (ECM) for Rapid ROI
Find out how combining ECM and BPM will help adress issues about content rich business processes....

All White Papers | All Webcasts