Deutsche Börse plans lay-offs and outsourcing as income dips

Deutsche Börse plans lay-offs and outsourcing as income dips

German exchange operator Deutsche Börse has outlined plans to save EUR50 million through an unspecified number of job cuts and outsourcing initiatives after reporting a EUR33 million net loss for the fourth quarter.

For the full year, the Frankfurt-based exchange booked a net profit of €496.1 million, down 52% from the record €1.03 billion it earned in 2008. A decline in trading on the cash and derivatives markets and a previously-disclosed €415.6 million impairment charge against its investment in US options exchange ISE hampered performance.

The company's executive board has moved to pare costs still further in 2010 with plans to save EUR50 million via management lay offs and an extension of its outsourcing programme. The Exchange says it is exploring the possibility of relocating further jobs after positive experiences gained from an earlier initiative to move 250 positions to a new centre in Prague.

Reports in German business daily Handelsblatt in January suggested the Bourse was preparing to cut up to 10% of its 3300-strong workforce and outsource certain activities of subsidiary depository Clearstream.

At the same time, Deutsche Börse says it will increase expenses for "growth initiatives" in 2010 by more than 50% over the previous year, to around €100 million. This will include spending on technology, risk management and product innovation.

Reto Francioni, CEO of Deutsche Börse says: "By taking these steps, we are creating additional flexibility in order to seize market opportunities resulting from the financial crisis. This will serve our clients, our shareholders and the effectiveness and integrity of the markets we organise."

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