Charles Schwab released 600 workers in response to a slow economy and pressure from falling interest rates, the company said.
The cuts represent almost 3% of bank performance and came across all sectors in the middle of an effort to streamline
"This spring, we have begun a process to review our base of cost to make sure we stay well in service to clients while navigating a challenging economic environment, "the company said in a statement. "As part of that process, we have decided to remove approximately 600 positions throughout the firm. Positive positions cover all staff scores, as well as organizations and locations throughout the company. " both worldwide and in the US A company source said staff cuts were a direct result of revenue pressure from declining rates, which hurt banks by tightening the margin between them. of loans and deposits. lending rates for banks by a quarter point, and is expected to make two additional cuts before the end of the year, the first to come next week's policy conference. President Donald Trump has aggressively pushed the Fed for more cuts, and even advanced zero or negative rates in a couple of tweets Wednesday. . The stock was up just 1.2% in 2019 compared to the 16.5% acquired for the SPDR S&P Bank ETF.
Other big banks are also getting pressures. Officials from Citigroup and Wells Fargo told an industry conference this week that they also expect lower interest rates, citing lower growth as well as Fed cuts. the first quarter. The company said in July that if the Fed continued to decline, it expected a further decline by the end of the year. A company official recently said Schwab was wrong this year in its rate forecasts, according to the Wall Street Journal.
"While it is not always easy to say goodbye to valued colleagues, these actions are a prudent step to ensure that we manage our cost growth while still investing in initiatives that enable us. to achieve greater scale and efficiency – such as platform improvements and digital experiences, "the company said.