Schwab, $SCHW, is laying off up to 2,154 people out of 35,900 staff.

Charles Schwab Corp. has reduced its workforce by 5% to 6%, affecting around 1,795 to 2,154 employees out of its total headcount of 35,900. This move is part of the company's cost-containment efforts and simplification measures as it integrates its acquisition of TD Ameritrade.

The staff reduction is accompanied by other actions, including changes in its real estate holdings, streamlining its operational model, and primarily targeting staffing reductions in non-client-facing areas.

An internal memo from Schwab stated, "We have said goodbye to approximately 5-6 percent of our workforce. These were hard but necessary steps to ensure Schwab remains highly competitive, with industry-leading levels of efficiency, well into the future."

Following this announcement, Schwab's stock price increased by 1.9% on Wednesday.

These job cuts are part of a previously disclosed plan to save $500 million in the second half of the year.

Jeff Schmitt, an analyst at William Blair, reiterated an "outperform" rating on Schwab, stating that the company has the potential for a substantial rebound in earnings per share (EPS) in 2024 and 2025. He highlighted factors such as decreasing cash sorting, lower short-term funding costs, stabilization of client cash, the return of organic growth to historical levels, and the resurgence of share buybacks.

Schmitt also noted potential risks for Schwab, including higher-than-expected cash sorting, integration challenges stemming from the TD Ameritrade acquisition, regulatory changes affecting payment for order flow, and a near-term shift in the Federal Reserve's interest rate policy toward easing.