The move comes on the heels of yet another quarter of disappointing earnings from the discount brokerage -- earnings that led Schwab's (SCH: news, chart) board to dump David Pottruck and bring back Schwab the same day the numbers came out.
Now, a week, after Schwab reclaimed the CEO's job he held from 1986 to 1997, the company is laying off 180 people as part of the branch closures, said Sarah Bulgatz, director of public relations for the San Francisco-based firm. Schwab also has laid off another 65 people from its technology division, Bulgatz said.
The moves leave Schwab with just over 16,000 employees and about 280 branches nationwide, she said.
Schwab needs to cut costs because it has been losing out to discount rivals such as ETrade (ET: news, chart) and full-service brokers including Merrill Lynch (MER: news, chart), analysts have been saying. The company also has drawn criticism from analysts for failed efforts at diversification.
Schwab on July 20 reported net income of $113 million, or 8 cents a share, a penny below expectations and 10 percent below earnings in the same period in 2003. Schwab's after-tax profit margin fell to 10.2 percent from 12.3 percent from the same period last year.
"The expense-cutting initiative gave us the chance to do several things all at once," said Bulgatz.
By Sept. 3, all 53 branches will be shut, Bulgatz said, adding that clients were sent letters Wednesday telling them about the changes. The majority of closures were in locations where Schwab has multiple branches, she said.
At the end of last month, the company closed the client sales and service portion of its Orlando, Fla., center, resulting in 240 layoffs, Bulgatz said. The firm retains service centers in Phoenix, Denver and Indianapolis, she added.
Schwab CFO Chris Dodds on July 20 said Schwab would look to trim an additional $50 million in costs, beyond the originally targeted $150 million.
Shares ended Wednesday down 9 cents at $8.63. After hours, shares slipped to $8.61.
Now, a week, after Schwab reclaimed the CEO's job he held from 1986 to 1997, the company is laying off 180 people as part of the branch closures, said Sarah Bulgatz, director of public relations for the San Francisco-based firm. Schwab also has laid off another 65 people from its technology division, Bulgatz said.
The moves leave Schwab with just over 16,000 employees and about 280 branches nationwide, she said.
Schwab needs to cut costs because it has been losing out to discount rivals such as ETrade (ET: news, chart) and full-service brokers including Merrill Lynch (MER: news, chart), analysts have been saying. The company also has drawn criticism from analysts for failed efforts at diversification.
Schwab on July 20 reported net income of $113 million, or 8 cents a share, a penny below expectations and 10 percent below earnings in the same period in 2003. Schwab's after-tax profit margin fell to 10.2 percent from 12.3 percent from the same period last year.
"The expense-cutting initiative gave us the chance to do several things all at once," said Bulgatz.
By Sept. 3, all 53 branches will be shut, Bulgatz said, adding that clients were sent letters Wednesday telling them about the changes. The majority of closures were in locations where Schwab has multiple branches, she said.
At the end of last month, the company closed the client sales and service portion of its Orlando, Fla., center, resulting in 240 layoffs, Bulgatz said. The firm retains service centers in Phoenix, Denver and Indianapolis, she added.
Schwab CFO Chris Dodds on July 20 said Schwab would look to trim an additional $50 million in costs, beyond the originally targeted $150 million.
Shares ended Wednesday down 9 cents at $8.63. After hours, shares slipped to $8.61.
