US Brokerage Giant Announces Massive Layoffs! Charles Schwab Spares No Expense, Spending $500 Million
Charles Schwab is expected to incur a cost of $400 million to $500 million in severance and related expenses in the second half of 2023, and streamline operations after integrating with DeMeLi Securities.
According to Dolphin Research APP, Charles Schwab (SCHW.US) stated in a filing submitted to the U.S. Securities and Exchange Commission on Monday that the company is planning to lay off employees and close or reduce the size of some company offices in preparation for the acquisition of TD Ameritrade, and to streamline operations after integration.
The brokerage giant expects to save at least $500 million in incremental operating costs annually through these measures. To achieve cost savings, Charles Schwab expects to incur $400 million to $500 million in severance and related costs, primarily related to employee compensation and benefits, as well as facility exits.
Most of the severance-related costs are expected to occur in the second half of 2023, while real estate-related costs will occur this year and next.
As of the time of writing, Charles Schwab rose slightly by 0.1% in after-hours trading, while the closing price fell by 0.2%.
As the potential layoffs are announced, Charles Schwab's net fund flows have been temporarily declining, and it is expected that some retail and advisory clients of TD Ameritrade will transfer to Charles Schwab in September.