Doesn't this strike anybody as odd? Here's an excerpt from an article written in Trader's Magazine on Sept. 10, 2002 (this year!) --------------------------------------------------- Resilience and Strength Among the dealers showing resilience are Schwab Capital Markets and Trading and Jefferies & Company. Schwab has added some nine pros in recent days in the sales and trading unit as it seeks to build up its offices in Boston, San Francisco and New York. That brings Schwab's total sales and trading team up to 30 pros. The pros operate under a salary and commission compensation structure. ------------------------------------------------------- now, one week later we get this off Bloomberg: ------------------------------------------------------- Schwab to Cut About 1,800 jobs as Trading Declines San Fran., Sept. 17 (Bloomberg) - Charles Schwab Corp., the biggest discount brokerage, said it will cut about 1,800 jobs or 10 percent of its workforce, because trading by individual investors has declined. -------------------------------------------------------- Mmmm - something just doesn't seem right!
It's not really that odd when you think about it. A lot of firms are still, I suspect, finidng they are bottom-heavy, with an excess of back office and support staff left over from the 'good old days'. It is actually very hard to pare these numbers back properly. You pare them back 1, 2, 3 times and still find you have too much capacity for current volumes. Increasing front-office numbers sends a (relatively cheap) signal to the market that you are committed to the business blah blah blah. Note: I have absolutely no connection with this company.
Mixed signals are everywhere these days, you can't even trust anything you read or hear...if there is one lesson to be learned, it's to trust no one but yourself and always manage risk by expecting the worse. I know for a fact that Enron, Worldcom, and the others encouraged their employees to purchase more company stocks by telling them that their company is stronger than ever, the falling stock price is simply a temporary correction in the market. If these employees have done their own research and hedge against possible downfall of the company they worked for, things would not have been as worse as right now.