Reuters: US Dollar Report: UPDATE 1-ICAP cuts about 70 jobs in London -sources

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UPDATE 1-ICAP cuts about 70 jobs in London -sources Jun 29th 2012, 09:38 Fri Jun 29, 2012 5:38am EDT By Luke Jeffs and Edward Krudy LONDON/NEW YORK, June 29 (Reuters) - ICAP has cut about 70 staff in London, people familiar with the matter told Reuters, as the world's largest derivatives broker aims to drive down costs by 50 million pounds ($77.5 million) this year. The broker, which draws revenue from matching buyers and sellers of bonds, currency and swaps, also told staff on Thursday it was cutting a further 30 jobs from its flagship United States office, said one source. "They are targeting those desks that are haemorrhaging cash, such as credit derivatives," said one source close to the firm. A spokesman for ICAP declined to comment on the job cuts. Michael Spencer, the Chief Executive of ICAP, said last month that cutting costs was a priority for the firm as he pledged to reduce overheads by 50 million each year until 2014. But he stressed in May that while the firm would be cutting from less profitable parts of the business, it planned to hire other staff to capitalise on growth opportunities, such as financial futures. "I'd be surprised if there were fewer people on aggregate working at ICAP in a year," Spencer said on a call last month. Inter-dealer brokers (IDBs) like ICAP and rival Tullett Prebon want to reduce their costs to counter the impact of slow trading activity as banks and hedge funds pull back from the market in response to the financial crisis. "All the inter-dealer brokers have suffered as voice broker compensation ratios have crept up as trading volumes have declined," said Richard Perrott, an analyst at Berenberg Bank. "The IDBs have continued to expand since 2008 but revenue per broker is down 20 percent since then - it was inevitable there would be some retrenchment," said Perrott. Tullett said last month it had cut 140 jobs this year, mostly among its brokers, to counter tough market conditions that left revenues flat for the early part of 2012. Link this Share this Digg this Email Reprints

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