Toronto Exchange Operator to Cut 10% of Workforce
September 21 2016 - 9:50AM
Dow Jones News
Canada's biggest stock-exchange operator said late Tuesday it
would cut 115 jobs, or around 10% of its workforce, as it continues
efforts to streamline operations and cut costs amid competitive
pressures.
TMX Group Ltd., which operates Canada's flagship Toronto Stock
Exchange, said the cuts would be completed by the end of the first
quarter of 2017 and would result in between 8 million Canadian
dollars ($6.1 million) and C$10 million of annual cost savings by
the end of the year. It expects another C$3 million to C$5 million
in annual savings by the end of 2017.
"We are taking deliberate and aggressive steps companywide to
effect meaningful change that will enhance client services, achieve
a more efficient cost structure and ultimately drive increased
value for our shareholders," said Lou Eccleston, TMX Group chief
executive, in a release.
The company's cost-cutting efforts come as it faces increasing
competition from new entrants. Earlier this year, Nasdaq Inc.
acquired Chi-X Canada, an alternative trading system for the TSX
and TSX Venture Exchange, the country's main equity market for
early-stage companies, which is also operated by TMX. Aequitas NEO
Exchange, a startup stock market backed by the brokerage unit of
Royal Bank of Canada and a number of big institutional investors,
also launched about a year-and-a-half ago.
RBC Capital Markets considers the head count reduction positive
for TMX, saying in a note that it believes cost-cutting is
necessary to help it compete.
TMX, which had 1,173 employees as of the end of June, said it
expects the planned job cuts to result in between C$15 million and
C$17 million of severance costs. The cuts will affect about 95
full-time positions and another 20 consultants and contractors, it
said.
Under the leadership of Mr. Eccleston, named chief executive in
late 2014, TMX has undergone some recent executive changes.
Financial-sector technology veteran Jay Rajarathinam was named
chief information officer in July, the same month John McKenzie
became chief financial officer.
Write to Judy McKinnon at judy.mckinnon@wsj.com.
(END) Dow Jones Newswires
September 21, 2016 09:35 ET (13:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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