Streamlined Exchange to shed 400 jobs

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Almost 400 jobs are to be lost at the London Stock Exchange, following a year-long review whose conclusions were announced yesterday.

The total includes 270 staff already expected to go as a result of the transfer of share settlement to the independent Crest system, and another 120 departures by the end of next year as part of a streamlining at all levels of the organisation. This will leave the Exchange with about 550 staff.

John Kemp-Welch, chairman of the Exchange, introduced its new corporate plan which included the job cuts as "the biggest set of changes the Exchange has experienced since Big Bang", the reforms of which were launched in 1986.

Fields Wicker-Miurin, director of strategy and finance, said the Exchange aimed to cut its costs to match an income expected to plummet to pounds 120m by the 1988-9 financial year, compared with pounds 200m in the year just ended.

She added that the Exchange aimed to cut out some layers of management and further decisions would be taken in detailed planning over the next three months.

This would produce a "smaller, flatter and more outward looking organisation". It was important to be able to take decisions rapidly and implement them and that meant less bureaucracy.

Mr Kemp-Welch said that a report on the way the organisation was managed would back the present structure in which an executive committee of seven full-time officials runs the organisation day to day.

There have been suggestions that the committee, chaired by Mr Kemp-Welch, should be overhauled following the departure of Michael Lawrence, the chief executive who was dismissed earlier this year.

Mr Lawrence was widely criticised by members for steering through radical changes of policy without adequately consulting them.

Mr Kemp-Welch said a continuation of the of executive committee system was "strongly endorsed" by the Exchange board last Thursday. A summary of the report, by Ian Plenderleith and Ian Salter, the two deputy chairmen, is to be published shortly.

Mr Kemp-Welch added that the question of whether the Exchange should convert to a public company owned by a wider group of shareholders than its members was "not on the agenda at the present time". But that did not mean the Exchange would not return to the subject in the future, he said.

The Exchange said it aimed to keep at least 90 per cent of world-wide trading in British equities; to attract at least 95 per cent of British companies raising capital by public issues and to provide the main listing and trading markets for at least 50 per cent of issuers from target emerging market countries.

In terms of dealing costs per unit of turnover, London ranked with New York among the larger exchanges in the world.

The Exchange said its income per head would be greater than rivals such as the New York Stock Exchange and the German exchanges and only surpassed by Tokyo.