Charles Schwab Corp. is planning to cut jobs and close or downsize offices to achieve at least $500 million in annual cost savings as the brokerage responds to investor pressure.
The company will close or cut down on some real estate and reduce employee headcount, Westlake, Texas-based Schwab said Monday in a regulatory filing. Schwab said it will incur costs of roughly $400 million to $500 million, “primarily related to employee compensation and benefits and facility exit costs,” as a result of the cuts.
Schwab fell 2.1% to $58.16 at 10 a.m. in New York, falling for an 11th-straight day — marking its longest falling streak since July 19, 2004.
“We have said, we intend to take a series of actions this year and into 2024 aimed at removing cost and complexity from the firm, including reducing our expense base and streamlining our operating model,” Mayura Hooper, spokesperson for Schwab, said in an emailed statement. “This will result in eliminating some positions in the coming months, mostly in non-client facing areas. We don’t yet have specifics to offer on how many positions will be eliminated.”
Schwab said earlier this month that it’s experiencing temporarily lower net flows of client money as the brokerage sees attrition of some retail and advisory clients’ assets while it integrates TD Ameritrade into its business.
The company has faced scrutiny from investors in recent months, particularly after the March collapse of several midsize US lenders focused attention on unrealized losses from securities held on bank balance sheets.