LIFFE cuts 600 jobs to stem drift of business

LIFFE, the London International Futures and Options Exchange is to lay off 60 per cent of its 1000 staff in a radical bid to halve its cost base and regain its position as Europe's premier derivatives exchange.

Chairman Brian Williamson has set the exchange the target of more than halving costs from pounds 138m to pounds 60m by the end of next year. The moves are in response to the loss to Frankfurt of business in the all-important German bund contract which has sparked concern about the ability of London to remain competitive, particulary as exchanges like Frankfurt and Zurich join forces in preparation for the introduction of the Euro next year.

Mr Williamson said yesterday that having decided on a course of action to win back the support of members, he was now ready to embark seriously on attempts to forge partnerships with other exchanges abroad.

Mr Williamson said that Frankfurt and Chicago would inevitably be on the list of exchanges with which Liffe would wish to deal, as would the London Clearing House. Mr Williamson said he was at one with David Hardy at LCH on the need to offer seamless clearing services, but insisted that although a full-blown merger was an option it was not necessarily the best way to achieve this.

LIFFE, he said, had had a large number of approaches from other exchanges wishing to ally with it, but had felt that it needed to get its own house in order before it could enter into meaningful discussions.

However, he insisted that any moves would have to be driven by the needs of customers not those of the exchange. He pointed to the case of Chicago which had so lost the confidence of members that some had started looking into setting up their own rival market. London, he pointed out, still turned over pounds 264bn worth of contracts each day.

"We have to deliver an efficient trading platform together with the products that our customers want at a price they are prepared to pay," Mr Williamson said.

"It is clear that nothing remotely like our current cost base is sustainable and that we shall have to cut costs to remain competitive," he added.

After consulting with the exchange's members, and its own internal committee, known as the Fast Progress Group, the Board, he said, had decided to focus on three priorities: finances, regulation and new partnerships.

A key part of the strategy unveiled yesterday will be to cut a swathe through the regulatory rulebook in an attempt to counter widespread criticism in the City that LIFFE's belt-and- braces approach to regulation was inappropriate for a market which deals exclusively in products aimed at a sophisticated wholesale market.

"It is the user that will call the shots," he says.

LIFFE will also speed up the move from open outcry to screen-based trade and step up efforts to overhaul its technology to cope with increasingly sophisticated demands.

Mr Williamson said the existing rulebook which was largely inherited from the outmoded Chicago model is based around the pit and no longer appriopriate in a screen-based market.

LIFFE yesterday refused to be drawn on where precisely the jos cuts would fall. However, at least 350 of the staff currently working at LIFFE are IT specialists working on a contract basis on specific projects like the LIFFE Connect electronic trading platform which is to be rolled out later this month.

The phasing out of pit trading will inevitably mean that the 100 or so staff responsible for supervising trade at the 10 futures pits at LIFFE in Cannon Bridge, London will no longer be needed. Simplifying the rulebook would also reduce the need for the current levels of staffing in the supervisory and investigation departments to be retained.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Arts and Entertainment
Jay Z has placed a bet on streaming being the future for music and videos
Arts and Entertainment
Festival-goers soak up the atmosphere at Glastonbury
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own