Innovation--Schwab's done it again. Instead of laying off a slew of employees when times are tough, at the end of January, Charles Schwab Corp. asked between 7,800 and 13,000 of its 26,000 employees to take three Fridays in the first quarter off without pay. The idea was to avoid permanent layoffs.
Oops. Well, that was the plan. Following its announcement, Schwab discovered that requiring employees to take days off might be illegal, so the company made the program "voluntary" and said employees could help by taking a vacation day or a floating holiday. The purpose, it reminded them, was to keep the company "financially strong."
We wonder how many employees who had been expected to take the days off now would go to work anyway.
But it was a fresh idea, the kind that Schwab is known for. On top of the Fridays off, senior Schwab officers also have agreed to take pay cuts for January and February. Co-CEOs Charles Schwab and David Pottruck will give up half their salaries. And it certainly did seem to help morale.
"It's great," exclaimed a Schwab customer representative in New York. "Most of the people affected will be in San Francisco. Schwab values its employees."
Some competitors see it differently. One described the move as "amateurish," and another said, "We're working to help them give those employees off Monday through Thursday, too."