Charles Schwab (NYSE:SCHW) will now close down offices and begin layoffs according to the company’s new plan to cut costs.
Charles Schwab stock fell nearly -5% on Tuesday and is currently down more than -15% in the past month.
Think Advisor reports that the news comes less than two weeks before its final integration efforts with TD Ameritrade are set to take place.
“A week ago, Schwab reported lower net flows in both retail and advisory clients’ assets tied to its $22 billion acquisition.
Earlier this year, Schwab slashed about 80 jobs, which came on top of the roughly 1,200 layoffs that had taken place since October 2020.”
The company will now close down several jobs, services and office locations to lower its yearly operating expenses by approximately $500 million a year.
The moves are part of its final integration efforts tied to the $22 billion purchase of TD Ameritrade, which are set to be completed over the Labor Day weekend, Sept. 2-5.
“In order to achieve these cost savings, the company expects to incur exit and related costs, primarily related to employee compensation and benefits and facility exit costs, of approximately $400 [million] to $500 million,” the firm said in an 8-K filing.
“We have said, we intend to take a series of actions this year and into 2024 aimed at removing cost and complexity from the firm, including reducing our expense base and streamlining our operating model,” said Mayura Hooper, a Schwab spokesperson.
“This will result in eliminating some positions in the coming months, mostly in non-client facing areas. We don’t yet have specifics to offer on how many positions will be eliminated,” Hooper explained.
SCHW stock is down more than -31% this year-to-date.
Other Market News Today
A US bank is now denying access to funds and freezing accounts in a new scandal that has customers shaken by the bank’s decisions.
Green Dot Bank, which offers banking and debit card services to people who shop at Walmart, is now being accused of giving its customers the runaround after being locked out of their accounts, reports NBC News.
Customers say the bank is freezing their accounts and have gone days, and in some cases weeks, with holds on their accounts.
Green Dot also operates under the name Go2Bank and furnishes deposit and debit card services to Walmart customers.
The bank, which has 33 million customers, initially said account balances and transactions were impacted by an issue with a payment processing partner.
Now, the bank says its systems are fully up and running – but customers say the problems persist, reports DH.
Florida resident Mary Cannon said she’s still having trouble. Cannon has been unable to access her IRS tax refund of more than $7,000 since mid-July. She said there remains a suspicious-activity hold on her account that she believes is erroneous and that she has been unable to resolve with the bank.
“They giving me the runaround,” she said.
Tennessee resident Sara Morgan has also been unable to access funds from, or make purchases through, her account for six days and counting.
“I’m beyond stressed,” she said in an email. “[I’m] having to pay bills with credit cards. I don’t see how they can get away with not having alternative access for people to get their money.”
UpDownRadar.com, which tracks web outages, was filled with customer complaints Friday, many of whom said they cannot access their funds.
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