NEW YORK -- NYSE Group Inc., the operator of the New York Stock Exchange, yesterday said it will cut more than 500 jobs as part of a strategy to trim $200 million in expenses in the next two years.
The world's largest stock exchange said the reductions will help eliminate duplicate services from last year's acquisition of electronic exchange Archipelago. Layoffs also come as the NYSE attempts to transform itself into an electronic marketplace, scaling back the need for floor specialists to execute trades.
A spokesman for the exchange would not comment on the layoffs, which will affect 400 employees and 120 full-time consultants.
Since March 2005, when the NYSE and its business units had 3,484 employees, there has been a reduction of 35 percent of its workforce or more than 950 employees. The latest cuts represent about 18 percent of employees.
The cuts are part of a plan to produce cost savings after its acquisition of Archipelago opened the way for it to become a public company in March. Chief financial officer Nelson Chai recently said the company has already achieved about $100 million of cost savings, and is on track to double that amount in 2007.
Richard Repetto, an analyst with Sandler O'Neill & Partners, said the layoffs were a good way to cut costs without hurting revenue.
Layoffs follow last month's disclosure that the NYSE would spend about $40 million to buy the Securities Industry Automation Corp. from the American Stock Exchange. The SIAC runs the computer systems and communications networks that power the two exchanges and send data.