Magazine article American Banker

Schwab Tries to Move Forward as It Cuts Back

Magazine article American Banker

Schwab Tries to Move Forward as It Cuts Back

Article excerpt

At Charles Schwab Corp., the chore of keeping technology expenditures in check as the sputtering stock market wreaks havoc on revenues falls to Dawn Gould Lepore, the San Francisco brokerage's vice chairman and chief information officer.

As others in the firm recently turned their attention to layoffs and cost-cutting measures, Ms. Lepore focused on sustaining tech-development momentum in a cost-conscious way, and matching computing power to declining demand.

Schwab's technology department is taking a more measured approach to rolling out consumer technologies and using flexible computing arrangements to contribute to the firm's belt-tightening, she said.

The leaner technology budget is dictated by a plan Schwab laid out March 23, to eliminate as many as 3,400 positions -- 13% of its work force -- in the second quarter. Schwab, like many of its competitors, is taking these steps in reaction to the anemic stock market, which has driven once active technology-stock traders away in droves. In February, Schwab's daily trading volume fell 31% from a year earlier.

The trickiest part of managing technology spending in a volatile market is accounting for ups and downs in computing demand, Ms. Lepore said. "We have to scale back even when ramping up and allow technology to be a shared advantage in tough and in good markets," she said in a speech Wednesday at GartnerGroup Inc.'s Internet and eBusiness Conference in New York.

Equally important is to keep a hand in innovative technology, even when increasingly conservative customers are shying away from such services. …

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