In another sign that times are tough for online brokerages, Charles Schwab & Co. and CSFBdirect Inc., online trading unit of New York-based Credit Suisse First Boston, said this week that it would cut staff to reduce costs.
"Last month, the securities markets were once again buffeted by signs of weakening corporate earnings and economic growth," said Schwab president and co-CEO David Pottruck in a statement today. The statement noted that daily average trades for February were down 31 percent from the same time last year.
Schwab has already cut staffing by 850 people through a hiring freeze to 25,000 in mid-February, but that wasn't enough.
"Given our business outlook, we are assessing the appropriate level of staffing, facilities and systems capacity reductions in each of our client and support enterprises," Pottruck said.
Meanwhile, CSFBdirect announced yesterday that the company would close its call center in Parsippany, N.J., and consolidate customer service at its three other locations.
The closing of the center, as well as reductions at other locations, bring total cuts to 150, or 10 percent of current US employees. The company said it expects to save US$11 million annually as a result of the cutbacks.