In response to investor demands, Charles Schwab is planning job cuts and the closure or downsizing of offices, with the goal of achieving a minimum of $500 million in annual cost savings.

In a regulatory filing on Monday (August 21), Charles Schwab announced its plans to decrease employee headcount and shutter or downsize certain real estate holdings. The company anticipates incurring expenses ranging from approximately $400 million to $500 million, primarily attributed to employee compensation and benefits, as well as expenses related to exiting facilities due to the planned cuts.

“We have said, we intend to take a series of actions this year and into 2024 aimed at removing cost and complexity from the firm, including reducing our expense base and streamlining our operating model. This will result in the elimination of some positions in the coming months, mostly in non-client-facing areas. We don’t yet have specifics to offer on how many positions will be eliminated,” Mayura Hooper, spokesperson for Schwab, said in a statement, reported The Business Times. 

Earlier this month, Schwab stated that it is currently observing a temporary decrease in net flows of client funds. This reduction is attributed to the attrition of assets from certain retail and advisory clients as the brokerage undergoes the integration of TD Ameritrade into its operations. 

In recent months, the company has been under investor scrutiny, especially following the collapse of several midsize US lenders in March. This event has drawn attention to unrealised losses stemming from securities held on bank balance sheets.