Charles Schwab to Cut 600 Employees
11 September 2019 - 06:20PM
Dow Jones News
By WSJ City
San Francisco brokerage Charles Schwab is cutting about 600
jobs, which would amount to roughly 3% of its staff, as it deals
with the impact of lower interest rates.
KEY FACTS
--- The cuts are part of an effort to rein in expenses as
falling interest rates pinch profit.
--- They are expected as soon as next week.
--- Many are expected to be in the retail division.
--- Schwab's rate-sensitive bank made up more than half its
overall revenue of $10.13bn last year.
--- One executive said Schwab was wrong in its interest-rate
forecasts and hadn't expected the Fed to cut rates.
--- Less than two months ago it struck a deal to buy assets of
USAA's investment-management firm for $1.8bn.
--- With the deal, Schwab is set to move deeper into the retail
financial-advice business.
"We initiated a process to review our expense base to ensure we
remain well-positioned to serve clients while navigating an
increasingly challenging economic environment.
Schwab spokeswoman
Why This Matters
The move by Schwab comes as firms across Wall Street and beyond
grapple with a shift in Federal Reserve policy. After holding
interest rates near zero for years after the 2008 financial crisis,
the Fed began lifting them in late 2015. Banks and brokerages
reaped the benefits, raising lending rates while keeping interest
on clients' cash low.
Concerns over slowing economic growth and trade policy spurred
the Fed to reverse course, cutting rates this summer and signaling
it would do so again.
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
September 11, 2019 04:05 ET (08:05 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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