Schwab to Cut 375 Jobs, Shut Call Center

Slumping online stock brokerage Charles Schwab Corp. will resort to more mass layoffs after concluding that the dismal market conditions are unlikely to improve this year.

The San Francisco-based company said Monday that it will eliminate 300 jobs by closing an Austin, Texas-based call center and will prune 75 jobs from other call centers in Denver, Indianapolis, Phoenix and Orlando, Fla.

More firings will occur after management spends the next one to two months mapping out ways to lower operating expenses by $200 million annually. Besides saving money by shrinking its payroll, Schwab said it probably will spend less on advertising and other discretionary items.

Schwab’s reorganization represents another major step backward for a once hard-charging business that cashed in on the online trading boom during the bull market of the 1990s.

As the bear market took hold in 2000, investors retreated and Schwab’s revenue began to shrivel. To cushion the blow to its profit, Schwab already has reduced its work force by 27%, or 7,200 jobs, since the end of 2000. The company employed 19,100 workers as of June 30.

Schwab’s latest cuts stem from a belief that investors are unlikely to regain their confidence in the scandal-plagued stock market any time soon, said Charles Schwab, the company’s founder and co-chief executive.

Like many other stock brokerages, Schwab is struggling to figure out the appropriate staff to carry in a volatile market that is being driven by wild mood swings.

Monday’s announcement followed a relatively busy month for Schwab. The company averaged 156,100 commission trades a day in July, a 26% increase from the same time last year.

The surge in business proved short-lived. Customer activity during the first week of August fell back to an average of 124,000 commission trades--about the same sluggish pace of May and June, Schwab said.

Schwab shares fell 11 cents to $8.46 on the New York Stock Exchange before the cutbacks were announced.