Charles Schwab plans to cut jobs and close or downsize some corporate offices as part of company efforts to reduce operating costs, the financial services firm said in a regulatory filing.
With these cuts, Charles Schwab expects to achieve at least 500 million US dollars (£392 million) of incremental annual run-rate cost savings – but also incur about 400 million dollars (£314 million) to 500 million dollars from expenses like employee compensation, benefits and facility exit costs.
The Westlake, Texas-based company did not specify how many positions would be eliminated — but suggested that the layoffs will take place in the coming months, noting that it anticipated most costs related to these job cuts for the second half of 2023.
Office locations set to be affected by closures or downsizing were also not specified, but Charles Schwab said it expected to incur those property-related costs in 2023 and 2024.
In Monday’s filing, the company pointed to previously announced “incremental actions to streamline its operations to prepare for post-integration” — in addition to cost synergies related to the integration of stockbroker TD Ameritrade, which Charles Schwab acquired for 22 billion dollars in 2020. The job cuts and office reductions arrive as the company assesses its property footprint and works to lower its operating costs.
“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,” a Charles Schwab spokesperson said. “This will result in eliminating some positions in the coming months, mostly in non-client facing areas.”
In July, Charles Schwab reported net income of 1.3 billion dollars (£1.02 billion), down from 1.8 billion dollars (£1.41 billion) for the same period in 2022. At the time, the company said it was closing offices in five cities — Atlanta, San Antonio, San Diego, St Louis and Tampa — by October 1 and downsizing its property footprint in six other markets, Charles Schwab confirmed to Think Advisor and other news outlets last month.
Charles Schwab shares were down about 3% in Tuesday morning trading.
