Charles Schwab announces
plans for more major layoffs
SAN FRANCISCO — Slumping stock broker Charles Schwab Corp. on Monday said it will resort to more mass layoffs after concluding the dismal market conditions are unlikely to improve this year.
The San Francisco-based company will start the purge by closing an Austin, Texas call center and pruning jobs from other call centers in Denver, Indianapolis, Phoenix and Orlando, Fla.
The Austin office closure will jettison 300 workers and the cuts in the call centers outside Texas will eliminate another 75 jobs, the company said.
Even more firings will occur after management spends the next one to two months mapping out ways to lower its operating expenses by $200 million annually.
Besides saving money by shrinking its payroll, Schwab said it will probably spend less on advertising and other discretionary items.
The cost-cutting steps disclosed Monday will save the company about $26 million annually. Schwab will absorb a $36 million charge against its third-quarter earnings to cover severance pay and the costs for closing offices.
agrees not to sell
IRVINE — The family that owns Freedom Communications Inc., a nationwide media firm that includes The Orange County Register, reached a tentative agreement Sunday not to sell the company.
Instead, family members will explore ways to transfer “significant ownership” from the older to the younger generation, said Kirk Hardie, head of the Hoiles Family Council.
“This is something that intrigued everybody enough to go forward researching it,” Hardie said.
Details of the proposed stock transfers were to be worked out. The plan will be considered by company board members at a meeting Tuesday, Hardie said.
Forty-three adult descendants of company founder R.C. Hoiles met at a Costa Mesa hotel over the weekend to discuss options for unhappy shareholders who have complained about their inability to cash out their holdings.
Selling the company was a possibility favored by some, including board member Tim Hoiles, the founder’s grandson. Independent analysts pegged the company’s value at $1.5 billion to $2 billion.
Tim Hoiles’ attorney, San Francisco antitrust lawyer Joseph M. Alioto, said Sunday night that Hoiles consented to trying the new plan after members of the fourth generation promised they would try to buy him out.
Hoiles owns 8.6 percent of the company and contends mismanagement has driven down his shares. He had threatened to sue family members.
Hoiles agreed not to file suit pending implementation of the new approach, Alioto said.
But the attorney emphasized that if the new plan did not come together quickly, selling the company was still an option.
“If this does not make it, the next in line is the sale of the company,” Alioto said.
Hardie previously said the family was divided over whether to sell. Some favored it, others were opposed, and a larger group was taking a wait-and-see approach before the weekend meeting.
“The company is not for sale,” Board Chairman R. David Threshie, who is married to R.C. Hoiles’ granddaughter, said in a company statement. “We have agreed to explore ways to transfer significant ownership to the younger generation.”
Freedom is the nation’s fourth largest family owned newspaper chain, according to newspaper analyst John Morton. It ranks behind Advance Publications Inc. (Newhouse), Hearst Corp. and Cox Newspapers Inc.
“The family shareholders are in agreement that this is an equitable and fair solution to move us forward,” Rick Oncken, chairman of the Family Liquidity Committee, said in the statement.
R.C. Hoiles, who bought the Santa Ana Register in 1935, used his newspaper to promulgate his libertarian political philosophy in Orange County.
Today, The Register has won three Pulitzer Prizes and has a circulation of 315,000. The paper is flagship of a group that includes The Gazette in Colorado Springs, Colo., and the Tribune papers in suburban Phoenix, among 28 daily newspapers, 37 weeklies and eight television stations.
Irvine, Calif.-based Freedom is the 12th largest newspaper group in circulation, according to the Audit Bureau of Circulations.
As a private company, Freedom doesn’t publicly report full financial information.