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TMX cuts 10% of workforce following Montreal Exchange acquisition

04 November 2008  |  1966 views  |  0 Source: TMX

TMX Group (TSX:X) today announced an important phase in its integration plan that was established to achieve the benefits from the combination of TSX Group and Montreal Exchange (MX), which was completed on May 1 this year.

"Our plan includes the investment in new business and product initiatives to better serve our customers' needs, particularly in the derivatives sector, while at the same time, achieving cost synergies by realizing efficiencies in data centre operations and corporate support functions" said Tom Kloet, CEO, TMX Group. "While it is unfortunate that we cannot retain all of our employees in the combined organization, I am confident that we have developed the best structure to ensure the success of TMX Group going forward" added Mr. Kloet.

TMX Group plans to grow its business by adding new products such as a futures contract based on a Canadian volatility index and mini-sized equity index futures contracts. In addition, plans call for the expansion of clearing of over-the-counter derivatives and further development of its SOLA technology platform, which supports both the Montreal Exchange and Boston Options Exchange (BOX). These initiatives are anticipated to eventually generate more than $10 million annually in new revenue1 and will require TMX Group to enhance its pool of expertise by adding approximately 30 highly skilled, value-added jobs in clearing, technology application development and product and services development at the MX office in Montreal.

As part of the plan, TMX Group's offices and data centers will be consolidated and the company will eliminate 85 corporate support and operational positions, or approximately 10% of its workforce, over a period of 14 months. The rationalization of data centres will enable customers to consolidate their connectivity networks and co-locate at one location which will greatly reduce their technology and communication expenditures.

"In the current financial context, we see great opportunities to create efficiencies for our customers while further developing the risk management portion of our business, which is a key component of the Montreal Exchange." noted Luc Bertrand, deputy CEO, TMX Group and President and CEO of the Montreal Exchange. "Montreal will continue to be the centre of expertise for derivatives, maintaining positions that are based on know-how and innovation, to service its range of new and existing products," he added.

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