here are continuing signs of belt-tightening across the mutual fund industry, a spokesperson with the firm told the MutualFundWire.com. Charles Schwab
is looking to reduce its operational expenses due to the volatile market. The firm's first focus will be on its call center operations.
Its most immediate plan will be to close down and sublease its client telephone service center in Austin, Texas. This will mean a cut of 300 jobs for Schwab. Employees at the call center are being notified today of the decision. The call center provides assistance to retail clients, the official explained.
As for its other call centers -- in Denver, Indianapolis, Orlando, and Phoenix -- 75 support and administrative positions are being eliminated. Schwab expects that these moves will reduce its pre-tax operating expenses by approximately $26 million for 2003.
But that is only the start. The California Colossus is looking to reduce operating expenses by $200 million. Top executives are looking to make future cuts in saffing and spending for professional services, development projects, and advertising. They uncertain at this stage where exactly those cuts will be.
If the firm witnesses an improvement of profitability, it states that it will use those profits towards employee bonuses.
"Our financial performance is simply not up to our expectations or those of our stockholders -- and we believe in striving for exceptional performance throughout every environment, even when faced with extremely difficult conditions such as now," stated David Pottruck, co-ceo and president, in a statement.
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