(January 31) – “Forget casual Fridays, the Charles Schwab Corporation has started canceling Fridays,” writes Patrick McGeehan in today’s New York Times.

“In a bid to cut expenses, Schwab, the San Francisco-based brokerage firm, has told about half of its employees not to show up for work on three Fridays in the next five weeks. Stretching out the weekends will bolster Schwab’s reported earnings for the quarter, even though the firm expects most of the eligible workers to use vacation time.”

“Christopher V. Dodds, Schwab’s chief financial officer, said the three-day weekends are the latest in a series of steps the company has taken since November to reduce costs during a slump in stock trading by the individual investors who are Schwab’s main customers. Their trading, on which Schwab earns commissions, dropped off when prices of technology stocks collapsed last spring and has not bounced back.”

“That slowdown contributed to a 27 percent drop in the firm’s earnings in the fourth quarter, during which it barely surpassed the 12 percent pretax profit margin that its executives have pledged to exceed every quarter. Late last year, the brokerage firm slashed the salaries of its executives by 5 percent to 50 percent, froze most hiring and told employees to limit their spending on travel and entertainment.”

” ‘We are looking as a management team at a whole wide range of steps we could take without resorting to the blunt ax of layoffs,’ Mr. Dodds said. ‘We view layoffs as darn-near the last resort.’ “

“Mr. Dodds declined to say how much money Schwab expected to save from these measures, which he described as creative alternatives to laying off workers. The savings from the Fridays off “is not a huge amount of money,” he said.”

“Amy Butte, an analyst at Bear, Stearns, estimated the Fridays off could reduce the firm’s compensation costs by $9 million to $15 million, or less than a penny a share. Ms. Butte, who recommends buying Schwab’s stock, called the decision to avoid layoffs ‘a long-term positive’ because it would build good will with employees and maintain the firm’s capacity to handle higher levels of trading activity when the market rebounds.”