Schwab to close branches and fire 250 more workers

SAN FRANCISCO — Steadily shrinking stock brokerage Charles Schwab Corp. disclosed plans Tuesday to fire 250 more workers and close about 20 more branches by year's end.

A spokesman for the company said no Utah operations would be affected.

The cutbacks will result in charges of $35 million to $50 million during the second half of the year, Schwab said in its quarterly report to shareholders. The San Francisco-based company absorbed restructuring charges of $24 million during the first half of the year, when it earned $126 million.

Schwab's management believes the company needs to remain frugal to bolster profits during a tepid economic recovery.

"We are very cautious about the environment, so we are continuing to be vigilant on the expense front," Schwab spokesman Glen Mathison said.

The brokerage's non-interest expenses totaled $1.6 billion during the first half of this year, an 8 percent decline from the same time last year.

Schwab has been shedding workers and offices for more than two years, unraveling much of its expansion launched during the stock market boom of the late 1990s.

The company employed 16,100 workers as of June 30 — a 39 percent reduction from 26,300 workers at the end of 2000. With some new hiring expected to offset a portion of the upcoming layoffs, Schwab said it expects to end the year with about 16,000 employees.

In the past two years, Schwab also has closed 31 branches, leaving 372 offices in 48 states as of June 30.

About 20 more offices scattered across the country will close before 2004, Mathison said. Schwab aims to have another office within 60 miles of each shuttered branch to minimize customer inconvenience, Mathison said.

Besides reducing expenses, Schwab also has been raising some of its account fees to boost profits.

Schwab's latest streamlining follows the company's highest quarterly profit since the end of 2000.

Despite the recent upturn, management still isn't convinced this year's stock market gains will produce enough revenue to justify the brokerage's current size, which already has been rolled back to 1999 levels.

Meanwhile, the company's stock remains well below its 1999 peak of $51.67. Schwab's shares rose 50 cents Tuesday to close at $10.75 on the New York Stock Exchange.