plans to cut another 250 employees by year's end, primarily through layoffs, and will record a $35 million to $50 million pretax charge to cover the reduction.
Schwab last month reported sharply higher earnings and raised its dividend, but said in its earnings release that it remained cautious about the sustainability of higher trading volume. The discount brokerage has been cutting branches and employees since 2001, and said in a federal filing Tuesday that it continues to "evaluate its workforce and facilities requirements in response to the market environment."
Schwab hopes "selective hiring" can reduce the layoff count somewhat. In addition to the staff reduction, Schwab plans unspecified branch closures.
In announcing its second-quarter earnings July 23, Schwab noted that "encouraging developments in both the geopolitical and economic arenas helped the securities markets rebound strongly from first-quarter levels," including stronger inflows to actively managed equity mutual funds and an 11% increase in margin loan balances.
It also noted, however, that 152,000 new accounts produced less than $7 billion in net new assets, something it said indicated lingering investor hesitancy.