Charles Schwab set to lay off 1,880 more The world's biggest discount stock brokerage cited a decline in trading volume by individual investors.

Posted: September 18, 2002

SAN FRANCISCO — Charles Schwab Corp., the world's biggest discount stock brokerage, said yesterday that it would cut about 1,880 jobs, or 10 percent of its workforce, because trading volume by individual investors has declined.

Schwab, which fired about 7,200 employees last year to slash costs, said the number of trades it has handled each day averaged 117,500 in August, a 25 percent decline from July.

"We're determined to deliver improved financial performance despite a continued tough market environment," Schwab's chief financial officer, Christopher Dodds, said. "There's a lot of loose threads out there in the world, and it's still weighing on investors' confidence."

The San Francisco company hinted in August that it would be making cuts, but provided no numbers. At that time, the company had about 18,800 employees.

It was not immediately known what business units would be targeted by the layoffs, which are expected to be completed by the end of November, Schwab spokesman Greg Gable said.

The firm, which grew at a record pace to employ about 26,800 people at the end of 2000, has struggled to pare costs and find new revenue sources. One rival, E*Trade Group Inc., has outperformed Schwab by focusing on its banking division, which has helped it collect assets and generate revenue during the decline in online trading.

Schwab is trying to attract wealthier clients who will pay for investment advice, so it can rely less on individual investors buying and selling stocks.

The company also said yesterday that it expected to earn 7 cents to 8 cents per share in the third quarter. Analysts surveyed by Thomson Financial/First Call were expecting an average of 8 cents per share. In last year's third quarter - which included four trading days when the stock market was closed because of the Sept. 11 attacks - Schwab earned 1 cent per share.

While trading volume fell last month from earlier in the summer, August's average was up 3 percent from a year ago. The averages exclude mutual-fund trading. Shares of Schwab closed down 60 cents, or 6.1 percent, yesterday at $9.15 on the New York Stock Exchange.

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