Charles Schwab Corp. has revised its recent edict that all nonessential employees take mandatory vacation days to help cut costs and shore up waning profits.
In a memo sent to Schwabs 26,000 employees on Thursday, Beth Sawi, the San Francisco financial services companys chief administrative officer, said that it will not require some staff members to take days off.
Its come to our attention that requiring employees to take Fridays off may raise some legal questions, Ms. Sawi wrote. If you want to come to work tomorrow, please do so.
Schwab had sent an e-mail last week telling nonessential employees, those that do not deal with the public, that they would have to take three designated Fridays off before March. Today was to have been the first such day. The company said that the move could trim costs by removing vacation accrual from its books.
But making employees take vacation could violate the labor code, said spokesman Glen Mathison. Along with its peers, Schwab has had to contend with a decline in retail trading online because of market volatility. It reported its first earnings decline in three years when profits slid 27% in the fourth quarter.
To pare costs the company has cut executive pay and reverted to bonuses consisting of stock options rather than cash.
Thursdays memo may have foiled the plan of one company looking to cash in on Schwab employees stuck for something to do with their free time.
Site59.com, a Web site that sells last-minute vacations at a discount, had pitched its services to Schwab Corp. and had offered a special discount to employees.
The site, which has received venture funding from several companies, including Goldman Sachs Group, contacted Schwab by e-mail trying to drum up business, said Pamela Johnston, a spokeswoman for Site59.
Named for the 59th, or last, minute of the hour, the site offers deals seven to 14 days in advance of travel and uses distressed or unsold flights, hotel rooms, and excursions, Ms. Johnston said. We would like to be able to help these people, she said.
Mr. Mathison said that Schwab is not officially cooperating with Site59.