In another sign of difficult market conditions, Knight Capital Group said it is reducing its global workforce by about 6 percent.
The Jersey City-based firm announced the job cuts on Thursday, saying the staff reductions are concentrated in full service sales and trading across both equities and fixed income. The cuts also affect research, technology, operations and other support functions.
"For the past two and a half years, aside from a few brief periods, we’ve witnessed a prolonged deterioration in market conditions," said Thomas Joyce, chairman and chief executive officer of Knight. "While we largely maintained our revenue momentum, overall financial performance lagged."
Joyce said Knight chose to focus the cuts on businesses and regions in which the competitive dynamics have shifted or where barriers have proven too great.
Asia has been especially hard hit by the cuts. Knight is eliminating or reassigning all of its institutional equities staff in Hong Kong. Trading in Asian equities will now be handled by teams in the United States and United Kingdom.
U.S. traders were not immune, however. A spokesperson for Knight confirmed the company has let go employees in Jersey City.
Among the casualties of the cutbacks is Knight’s new global program trading unit, which the company is shuttering after having launched just this April. The unit included 20 sales and trading experts in the U.S., Europe and Asia.
Knight’s U.S. equities program trading will not be affected, the company told Traders Magazine.
During an earnings conference call last month, Joyce said Knight had seen "soft" volumes for its full-service institutional sales and trading operations. He also said that the average daily dollar value traded at the firm fell 14 percent year-over-year.
In all, the staff reductions will decrease Knight’s annual operating expenses by between $40 million and $50 million, according to the company.
The belt-tightening might not be over yet. Knight said it would continue to seek further cuts in operating expenses as part of a broader plan.
