Charles Schwab plans to cut jobs and close offices to save $500 million as layoffs spread on Wall Street
- Charles Schwab is cutting an undisclosed number of jobs, firm said Monday
- Cuts are related to the integration of TD Ameritrade, acquired in 2020
- Brokerage expects the cuts to save about $500 million annually
US brokerage firm Charles Schwab has said it plans to cut jobs in a bid to slash $500 million in annual costs, joining a list of Wall Street firms taking a similar path.
The company did not disclose the number of employees it was going to lay off, and did not immediately respond to a request for comment from DailyMail.com on Tuesday morning.
Several companies across corporate America, including Wall Street banks, have trimmed their workforce this year in a bid to rein in costs amid still-high inflation and a dealmaking slump due to higher borrowing costs.
Schwab’s layoff plans were revealed in a regulatory filing on Monday, which also said it was currently assessing its real estate footprint, and that it planned to close or downsize certain corporate offices.
The company expects to incur one-time costs related to severance payments and facility exit expenses in the range of $400 million to $500 million.
US brokerage firm Charles Schwab has said it plans to cut jobs in a bid to slash $500 million in annual costs. Pictured: Charles R. Schwab, founder and co-chairman of The Charles Schwab Corporation
The brokerage said it anticipated most costs related to layoffs would be incurred in the second half of 2023, while cost related to real estate would be spread across this year and next.
It expects to realize about $500 million of incremental annual run-rate cost savings by undertaking these actions.
The company said the cuts were related to the integration of TD Ameritrade, the brokerage firm that Schwab acquired in 2020.
All customers at TD Ameritrade are having their accounts moved over to Schwab, a process that has already begun and is expected to be finalized over Labor Day weekend.
Meanwhile, Schwab has recently had to turn to supplementary funding sources to counter an uncertain economic environment.
In June, the Westlake, Texas-based company said it was relying on more expensive funding sources, such as borrowing from the Federal Home Loan Bank, to supplement its cash flow.
In July, Charles Schwab reported a smaller-than-expected drop in second-quarter profit, as a jump in asset management fees helped soften the hit from a decline in interest revenue.
Earlier in the year, the brokerage said it was looking to raise up to $2.5 billion through a debt offering.
Schwab’s layoff plans were revealed in a regulatory filing on Monday, which also said it was currently assessing its real estate footprint and plans to close offices
Schwab is not the only Wall Street firm seeking to trim costs through layoffs.
Through July, the financial sector has seen 41,565 announced layoffs, up from 12,965 in the same period last year, according to a report from placement firm Challenger Grey & Christmas.
Goldman Sachs cut some 3,400 jobs this year, its largest workforce reduction since the 2008 recession, amid a slump in M&A dealmaking.
Morgan Stanley cut about 3,000 jobs in the first half of the year, and Bank of America said it is cutting 4,000 positions.
Citigroup also announced 5,000 job cuts mostly impact its investment banking and trading departments.
Executives are trying to reverse the headcount proliferation in banking, which was exacerbated by several years during the pandemic in which annual performance-based culls were suspended at many firms.