Stock images of Schwab and TD Ameritrade signs (Photos: Bloomberg/Shutterstock; Image by Chris Nicholls/ALM)

Charles Schwab is closing almost 80% of TD Ameritrade’s network of about  260 branches that serve investors, according to Joe Martinetto, senior executive vice president and COO at Charles Schwab.

The move is part of planned expense reductions tied to the integration of TD Ameritrade into Charles Schwab as part of the $22 billion transaction that closed Oct. 6.

“We’re retaining about 55” of the TD branches, and staff working in “the majority of the rest will co-locate into nearby Schwab branches, where we’ll have both Schwab and TD Ameritrade employees,” he said during Schwab’s recent fall update webcast.

“Our combined branch footprint after the consolidation will be larger, with over 400 branches, 140 of which will be shared through conversion, and 90% of our clients will have a branch within 25 miles up from 80% before the transaction,” he explained.

“We’ve already taken steps to achieve between $250 million and $300 million in expense reductions,” according to Martinetto.

“We’ve aligned the management structure, and across management in the branch network eliminated over about 1,000 roles,” he stated.

His comments during the business update webcast came three days after the Schwab Executive Council  explained in a statement that the layoffs affected about 3% of the combined workforce of Charles Schwab and TD Ameritrade.

The firm “moved aggressively to rationalize the branch network,” Martinetto said during the webcast, noting “there was a significant amount of overlap across our footprints which we’re eliminating.”

Schwab has also “closed the number of previously open management positions, as well as reduced our anticipated marketing spend,” he said, adding: “While it’ll take some time to recognize the full level of synergies, we expect to see additional reductions over the course of the next 36 months.”

As a reminder, he noted, Schwab had targeted between $1.8 billion and $2 billion in expense reduction synergies between the combined entities.

“We spent the last 10 plus months developing plans to achieve this level of savings, and by close we had high level plans at the business unit level to achieve it,” he said.

“We still believe it will take 18 to 36 months to get through broker-dealer consolidation, account conversion, and the shutdown of all the redundant systems and functions that are necessary to achieve this level of savings,” the COO added.

For more details on the the deal’s history and insights into what it means for the future of the RIA industry: