Schwab's Staffing Solution

When the stock market went south last year, earnings at Charles Schwab dropped with it. The brokerage firm lost a quarter of its online trading business as the economy slowed.

"When we get down to one percent growth or zero percent growth, that feels uncomfortable to most of us," said Charles Schwab.

But instead of laying off workers, Schwab trimmed executive salaries and this week asked nearly half of its employees to take three Fridays off over the next two months, reports CBS News Correspondent Anthony Mason.

"They want to make sure they have the people," said Gardner Jackson of State Street Research. "This is the guts of the business. They want to make sure they have the people to grow down the road."

The Schwab strategy of cutting hours instead of cutting workers is, of course, less painful for employees. But it's also a key reason why, in this rapidly slowing economy, the unemployment rate isn't rising more quickly.

"I think what's happening is businesses are looking at that level of the unemployment rate and deciding that… 'well, wait a minute, if this growth slowdown turns out to be fairly short lived, I might not be able to get those people back," said Stephen Slifer of Lehman Brothers.

In a tight job market, talent is not only hard to find, it can cost big money to train the workers.

"And the smart ones are gonna try to do just what Schwab is trying to do: retain the good people as long as you can, because of how expensive it is to rehire," Jackson said.

Schwab has not ruled out layoffs if a recession sets in, but its founder is betting on a quick rebound.

Schwab insists there is nothing out there that scares him about the economy, which he describes as "absolutely strong."

But if rate cuts and tax cuts aren't enough to get the economy moving again, for many companies job cuts may be the only solution.

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