Charles Schwab the largest US online and discount stockbroker, said today it was cutting 2,750 to 3,400 jobs, or 11 to 13 per cent of its total staff, joining the pack of financial services companies cutting costs as markets soften.
Mr Schwab also said its earnings for the first quarter would fall short of Wall Street estimates by 27 per cent amid the stock market slump and slowing economy.
"With a slowing economy and weakening corporate earnings, our clients are facing the most challenging market environment in many years," said president and co-chief executive Mr David Pottruck in a statement. "These are extremely difficult decisions to make, but we believe they are necessary responses to fundamental changes in the market environment and investor behaviors."
The company's shares plunged 5.3 per cent in early trading on the New York Stock Exchange, slicing through a previous 52-week low of $15.35. The shares are off almost two-thirds from their 52-week high of $44.75.
It is not the first time this year that Schwab has taken steps to cut costs. In late January, it announced a voluntary plan in which 13,000, or about half the company, would take off some Fridays to help keep down costs. The move was an extension of Schwab's cost-cutting plans, which included cutting down travel expenses and senior staff taking pay cuts.