Thread regarding Charles Schwab Corp. layoffs

Layoffs are guaranteed, here’s why.

Let’s take a look at Schwab’s $10 billion revenue breakout for 2019:

  1. 60% net interest income
  2. 30% asset management
  3. 6% trade commissions
  4. 4% other, including payment for order flow
  1. The Fed took rates to zero. NII isn’t going to zero, because you can still get yield, but it’s been maybe halved. But, with more clients going to cash, you get some uplift as the yield Schwab earns on cash is greater than on managed or passive products.
  1. The market crash means lower asset values to generate yield from. But the move to client cash is positive for Schwab.
  1. Not zero, but largely so.
  1. Payment for order flow is up because of market volatility.

Okay, so full year revenue is screwed. Maybe down 30-40%.

Let’s look at Schwab’s $6 billion in costs:

  1. 20% is non-negotiable (rent, D&A, regulatory fees)
  2. 20% is negotiable non-headcount (professional services, marketing, communications)
  3. 60% is headcount related

My two cents.

Anything in the B. category above gets heavily reviewed and cut.

For the C. category,

Client facing roles should be okay, as long as you’re not in a non-core team. If you’re an FC or in the call center, you’re safe. If not, you’re as risk.

Non-client facing roles should be worried. There is still a lot of bloat and paper pushers who don’t add much value.

My advice is, assume you will be laid off. Start preparing your resume and get into recruiting mode. It’s a tough job market now, but at least you’ll be prepared if the worst happens.

Don’t assume the severance plan will stay the same, as they can change it any moment.

by Anonymous
| 3101 views | | 16 replies (last ) | Reply
Post ID: @OP+147KHEFC
Comment! It's anonymous!

16 replies (most recent on top)

@8kcu+147KHEFC
I don't think this poster works at Schwab, a financial company. Ever heard of DRIP? Dividend Reinvestment Program. I would take my "chump change", and do a DRIP. The small stuff adds up. This is how Chuck made his billions. Remember, talk to Chuck.

by Anonymous
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Post ID: @8bsm+147KHEFC

No some of us are on the right trajectory to becoming grade 60. Everything is about your career trajectory. And yes, the $1000 spot award is chump change. Losers typically don't get any spot awards. BTW, the spot award is coming in current pay period, so it should be deposited now, minus taxes.

by Anonymous
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Post ID: @8dfi+147KHEFC

Some folks can really use that bonus money, so please donate it if you consider it “chump change”. And it will be pAid. The list probably needs to be signed off on before it gets processed by payroll, and remember payday is twice a month. It will most likely be paid per the usual payroll schedule.

by A charity who would love that money
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Post ID: @8kcu+147KHEFC

The guy calling others losers is the biggest one. One day his ego will just overpower and destroy him. In the meantime, He should donate this “chump change” to a charity that can use it or shove it up his xxx. A little compassion goes a long way. And no one is immune to layoffs. Some top leadership had to go in the last lay-off as the org flattened.

by Fed up with your ego
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Post ID: @8zjs+147KHEFC

Amazing that some dude here is moaning about his 1000 bucks spot award (more like 650.00) after taxes. Another dude is talking about his 'trajectory path' in Schwab. Dude you will end up unemployed at some point in your career, sooner or later.
Besides, Schwab is not Apple so relax.
To the rest, please stay safe. The rest (work and material stuff) comes and go.

by SunnyDay
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Post ID: @7fwn+147KHEFC

100%

by Anonymous
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Post ID: @6kpd+147KHEFC

Only losers look forward to a $1000 spot award. We that are on the right career trajectory in Schwab, that are moving up, and who are not losers, get spot awards all the time. And $1,000 is just chump change.

by Anonymous
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Post ID: @6bbr+147KHEFC

To @5wkv+147KHEFC: You need to get off your high horse and STFU. I give a rats but about others that lost their job. I just want my $1000 spot award. It was granted, promised, and now they need to pay up. Not tomorrow, not next week, not in a month, but now. Now. Now.

by Anonymous
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Post ID: @5msq+147KHEFC

@ "I'm still waiting for my $1000 spot award" - You're a jerk. We haven't even reached our first pay day since this was announced. You're still getting paid and you're waiting on a an extra thousand that was only promised to you two weeks ago, you should have planned better. Start thinking about all who have lost their jobs and quit being so selfish and stop complaining. STFU.

by Anonymous
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Post ID: @5wkv+147KHEFC

I'm still waiting for my $1000 spot award. Future pay period? Hello. McFly. We need that for our lunch money.

by Anonymous
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Post ID: @4krh+147KHEFC

And if you’re in Chicago, push that panic button now!! They ain’t paying that kinda rent for much longer regardless.

by Anonymous
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Post ID: @3sve+147KHEFC

The thought going into the takeover is that the Ameritrade data will come to Schwab systems. Some of the Ameritrade applications may be used if they are found to be better than the Schwab ones. But that seems to be a decision that's going to be made later. That's what the CIO / CTO said at a recent townhall.

by Anonymous
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Post ID: @1qha+147KHEFC

Thanks for the breakdown. And if Ameritrade goes through, I’d expect big cuts in tech as Ameritrade is known for its systems while schwab is not. I wonder if this is what made this company so attractive to schwab.

by Anonymous
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Post ID: @1mvz+147KHEFC

Stocking fear. Not helping.

by Anonymous
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Post ID: @mtz+147KHEFC

You what is negotiable, and can be halted now? DC4. Public Cloud. TDA acquisition.

by Anonymous
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Post ID: @ptp+147KHEFC

Nice breakdown poster! Sage advice for those at risk too.

by Anonymous
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Post ID: @tgr+147KHEFC

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