TD Ameritrade has cut more than 1,100 Scottrade jobs
Consolidation following TD's $4 billion acquisition of Scottrade has resulted in a combination of layoffs and new hires.
As TD Ameritrade Holding Corp. continues to absorb its $4 billion acquisition of Scottrade Financial Services, layoffs have now exceeded 1,100 in the St. Louis area where Scottrade is based, according to published reports.
A TD Ameritrade spokesman said the layoffs, which began in November, are in line with the expectations laid out at the completion of the acquisition in September.
“We said that we expected to employ about 800 to 1,000 in the St. Louis area, including a well-represented corporate presence, a sizable technology presence and a new customer service center,” TD spokesman Joseph Giannone said.
According to a report in the St. Louis Post-Dispatch, at the time of the acquisition Scottrade had approximately 1,800 employees in the St. Louis area.
TD Ameritrade Holding Co. is based in Omaha, Neb. Its custodian business, TD Ameritrade Institutional, is based in Jersey City, N.J.
Mr. Giannone said that concurrent with the layoffs, “We’re in the process of hiring approximately 100 new employees over the next several months as we continue building out our new client center in St. Louis.
“Since last summer, nearly 500 new full-time employees have come on board to staff the service center,” he added. “Our commitment to the St. Louis community will not change.”
TD Ameritrade Institutional is one of the four largest custodians. TD, Fidelity Clearing & Custody Solutions, Schwab Advisor Services and Pershing Advisor Solutions account for an estimated $2.5 trillion in custody assets.
TD does not disclose its total amount of custody assets, but reports 5,000 registered investment adviser clients.
By contrast, as a separate business, Scottrade Advisor Services was considered a second-tier player in the custody space, with $10 billion in custody assets and 800 RIA clients.
Regarding the ongoing consolidation, Alois Pirker, research director at Aite Group, said the overlapping nature of TD and Scottrade is a primary driver behind the layoffs.
“Clearly, the combined entity will not continue to run separate platforms for each legacy entity but rather combine them into one,” Mr. Pirker said. “The head count attached to the chosen platform will most likely remain at the combined firm, while staff on the decommissioned platforms will have to find a new role internally or will be made redundant.”
Mr. Giannone said that “Former Scottrade employees who will not be continuing with the company post-integration are receiving notices and information.”
“We have committed to a careful and organized schedule for these notices, with all impacted employees being treated fairly,” he added. “Notices are happening in phases, with employment end-dates taking place over the next several months.”
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