Wednesday, January 31, 2001
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Posted on: Wednesday, January 31, 2001

Schwab mandates Fridays off to cut costs

Associated Press

SAN FRANCISCO — Charles Schwab Corp. is ordering thousands of its employees to take off three Fridays during the next five weeks as part of the stock brokerage’s efforts to weather a downturn in its once-booming business.

All employees who don’t interact with Schwab’s customers in the branches or telephone service centers have been told not to report for work this Friday, Feb. 16 and March 2, said spokesman Glen Mathison. To get paid, the employees will have to use vacation time.

Schwab is still determining how many employees will be affected. More than 10,000 of Schwab’s 26,300 full-time employees probably will be kept away from the office.

Although its operations will be scaled back during the three Fridays, all of Schwab’s branches will remain open.

The Friday furloughs will help Schwab pad its profits during what analysts expect to be a poor quarter for the company. To combat sluggish market conditions, Schwab has already slashed management salaries by up to 50 percent through March and reduced the company’s first-quarter bonus pool by 5 percent.

A steady escalation in stock prices had ignited a period of rapid growth at Schwab. Last year the company increased its payroll by more than 30 percent, or 6,300 employees, and opened a sprawling new suburban campus about 40 miles east of its San Francisco headquarters.

However, Schwab has been hard hit by the recent Wall Street volatility that has scared off many investors.

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