Charles Schwab Corp. is planning to further downsize its real estate footprint and eliminate jobs in a cost-cutting effort, the company said in a filing with the Securities and Exchange Commission this week. The financial services giant didn't specify where the reductions will be or provide an exact timetable.
“The company is currently assessing its real estate footprint, and plans to close or downsize certain corporate offices,” Charles Schwab said in an 8-K filing. “In addition, the company plans to reduce its operating costs primarily through lower headcount and professional services.”
By taking these actions, the company said it expects to realize $500M in “incremental annual run-rate cost savings,” though it also said costs associated with the cuts, especially severance, will represent a one-time expense of $400M to $500M.
The company anticipates that most costs related to staff cuts will be incurred this year, while the costs related to real estate downsizing will be incurred this year and in 2024.
The newly announced cuts will be in addition to previously announced reductions in real estate usage for the company. In July — when Charles Schwab reported net income of $1.3B for the second quarter, down from $1.8B a year earlier — it also said it was closing offices in Atlanta, San Diego, St. Louis, San Antonio and Tampa, Florida, by the fourth quarter, with employees in these locations expected to work from home.
The company also announced downsizing of offices in Boston, Chicago, San Francisco and other markets in July, though not complete closures.
In 2020, Charles Schwab acquired competitor TD Ameritrade for $22B and moved its combined headquarters from San Francisco to the Dallas-Fort Worth suburb of Westlake. The process of integrating TD Ameritrade into Charles Schwab is ongoing.
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