TD Waterhouse Group chief executive officer Stephen D. McDonald said the discount brokerage will continue to cut costs to withstand the ongoing market volatility but does not plan the sort of massive layoffs that its peers in online brokerage have initiated.

In a presentation at an investor conference Monday in New York hosted by Putnam Lovell Securities, Mr. McDonald conceded that the past 12 months have been difficult. But he said TD Waterhouse, which is mostly owned by Toronto-Dominion Bank, will continue to trim its payroll through attrition.

Other online brokerages have taken more drastic measures in the face of a protracted downturn in the financial markets that has kept investors sidelined. The nation's biggest discount broker, Charles Schwab Corp. in San Francisco, announced in March that it will cut 13% of its work force, and Ameritrade Holding Corp., Omaha, said Friday that it will cut 170 jobs.

Mr. McDonald, who noted that his company's turnover rate is already at 20%, said Waterhouse will also cut its marketing budget, despite what he described as the brand's relative weakness.

"Spending a lot of money on branding and account acquisition makes no sense when people sit on their hands," he said. He noted that TD Waterhouse allocated 7% of revenues, or $111 million, to marketing last year.

He said Toronto-Dominion is not apt to follow the lead of Credit Suisse First Boston, which is looking to buy all outstanding shares of its CSFBdirect online subsidiary in an effort to get the unit out of the public spotlight. The rationale of TD Waterhouse's initial public offering, in June 1999, Mr. McDonald said, "was gaining currency to participate in consolidation."

TD Waterhouse had announced in February that it would probably fall short of its goal of opening 1.2 million accounts in 2001. In the first quarter, which ended Jan. 31, its revenues fell 9%, to $347 million, against the year-earlier period. Its number of customers trading online slipped 21%, which caused a 24% drop in revenues from commissions and fees. Still, profits doubled for the year that ended Oct. 31, Mr. McDonald noted at the conference Monday.

Discussing TD Waterhouse's outlook for the rest of 2001, he said that "it is only going to get better." Working in the company's favor over the long haul, he said, are its price structure, physical presence - a branch network - and ability to serve several investor types simultaneously.

He said the company has particularly low customer acquisition costs - an average of $112 per new account, versus $401 for Credit Suisse First Boston and $263 for E-Trade.

"We are exclusively focusing on online, unlike some competitors who try to focus on online and offline brokerage," Mr. McDonald said. This, he said, enables TD Waterhouse to acquire valuable customer information for precision marketing.

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