Shares of Charles Schwab (SCHW) - Get Report rose Wednesday amid plans by the financial services giant to slash 600 jobs, or 3% of its workforce, as it grapples with declining profit margins at its key banking unit.

News of the job cuts, confirmed by a company spokesperson, triggered a round of buying by investors, with Schwab's stock price rising 1.17% to $42.44.

Schwab employees learned of the cuts at as town hall-style meeting with CEO Walter Bettinger, according to The Wall Street Journal, which first reported the story.

Citing an "increasingly challenging economic environment," Schwab, in a statement, said the cuts come after an internal review launched in the spring.

"Impacted positions span all staffing grades, as well as organizations and locations across the company," the company said in a statement.

Schwab's banking unit has seen its profit margins squeezed in the current, low-interest-rate environment, with the Federal Reserve gearing up for another possible rate cut next week after dropping rates by a quarter of a percentage point over the summer.

Schwab last week also began moving ahead with plans to close its Singapore office by the end of 2019, Reuters reported.

The squeeze on its banking income is a big deal for Schwab, which derives the majority of its revenue from banking, Zacks Investment Research noted.

"Schwab derives majority of its revenues from net interest it earns on client cash held," Zacks said, noting a "fall in interest rates tends to squeeze this revenue source."