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Ameritrade (Nasdaq: AMTD) fell 16 U.S. cents to $5.13 Monday morning, after the online brokerage said it would cut about 170 jobs -- reportedly 7 percent of its workforce -- in coming weeks.
Most of the jobs being eliminated are at call centers in Omaha, Nebraska, and Fort Worth, Texas, according to Ameritrade. The company said that the move would not affect customer service.
"This is a difficult decision to make, but necessary to maintain our strength and position for our long-term success," Ameritrade said. "Unlike many of our competitors who may be threatened by the weight of their own infrastructure, Ameritrade is built to be lean and flexible."
Also on Monday, a Wall Street Journal report said Jack McDonnell, head of Ameritrade's online brokerage unit, resigned two weeks ago. The company statement did not mention McDonnell.
Ameritrade, based in Omaha, recently lowered its financial projections for the rest of the year. The company expects revenue for the quarter just ended to total $107 million to $126 million, down from $130.7 million in the previous quarter.
The layoffs are Ameritrade's second batch this year. In January, Ameritrade said it let go more than 230 full-time employees, or about 9 percent of its workforce, as well as 100 temporary workers. Those layoffs also mainly affected workers in Fort Worth and Omaha.
Competitor Charles Schwab has also cut jobs, recently announcing that it would reduce its workforce by 11 to 13 percent in order to cut costs amid a downturn in trading volume.
"When we see the market return to higher volumes, Ameritrade will be well positioned to lead the brokerage industry and return even more value to our shareholders," Ameritrade said Monday.
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