Charles Schwab feels the pinch

Online pioneer Charles Schwab has so far avoided lay-offs

The world's biggest online broker, Charles Schwab, has confirmed that it needs to cut costs amid a downturn in the share-trading market.

The discount brokerage said it would ask up to 50% of its 26,000 US staff to stay at home on three Fridays in February and March - either on unpaid leave or on vacation.

A company spokesman told BBC News Online that the measure were one way to avoid shedding jobs: "We are taking this moment by moment and month by month... and hope to keep redundancies as a cost cutting measure at the bottom of our list."

The firm says that customers will not notice the difference - only staff that have "no customer responsibility" will be asked to go on leave.

Schwab's international operations will not be affected.

The costs of plunging markets

Online brokers that trade share on behalf of private investors have had a hard time recently. Burnt during the stock market downturn in the last nine months of 2000, many investors have stopped to actively manage their stock portfolios, or have completely pulled out of the market.

The online brokerages business has been particularly hard hit, according to industry experts.

This results in dramatically fewer brokerage fees and a profit slump at many online trading firms.

Some online brokers - both in the United States and in Europe - have cut back dramatically. Ameritrade, for example, said earlier this month that it would have to reduce its workforce by 9%.

So far Charles Schwab has managed to avoid lay-offs. Instead, its managers have been asked to take pay cuts and save on corporate travel expenses.