Schwab Cutting 375 More Jobs

The layoff blues have struck again at Charles Schwab ( SCH), the nation's biggest discount brokerage and one of the first Wall Street firms to start shedding jobs last year.

Schwab, after the market's close on Monday, announced it was eliminating about 375 employees, most of them workers at a customer call-center in Austin, Texas. In earlier cuts, Schwab, with a current worldwide workforce of about 19,000, eliminated some 6,000 jobs.

The latest layoffs weren't a total surprise. A week ago, Schwab confirmed that more cuts were in the offing because its 8 million customers were continuing to avoid investing in stocks.

The job cuts came even as the San Francisco-based brokerage reported a big 20% surge in customer trades in July compared to June. But many industry analysts say the spike in trading activity is not necessarily a harbinger of good things to come for the brokerage business. Rather, the increased activity is the result of investors selling stocks and shares in stock mutual funds during the big summer selloff in the stock market.

The latest round of job cuts are expected to reduce Schwab's pre-tax operating expenses by $26 million next year. In light of the job cuts, the company intends to take a $36 million pre-tax restructuring charge in the third quarter.

The sour stock market environment this summer is causing many brokerage analysts to start reducing their third-quarter earnings estimates for Wall Street firms. And some analysts are expecting more layoffs on Wall Street to occur shortly after the Labor Day holiday.

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