Getco LLC, a Chicago-based automated trading firm, eliminated about 40 jobs last week amid an industry slowdown in transactions, according to a person with direct knowledge of the situation.
Sophie Sohn, a Getco spokeswoman, confirmed in a phone interview that the company cut positions on June 7. Edward Boyle, hired a year-and-a-half ago from NYSE Euronext to manage the firm’s relationships with exchanges and work on business strategy, was among the people let go, she said.
Daniel Coleman, who became Getco’s chief executive officer in February, is confronting a third straight annual slowdown in American equities trading. Half the cuts, which followed the company’s first strategic review of its businesses, were in the U.S., according to the person with knowledge of the matter, who declined to be identified because the issue is private. The company had about 450 employees before the layoffs.
“It’s not a huge surprise,” Sang Lee, managing partner at Aite Group LLC in Boston, said in a phone interview. “It doesn’t take a genius to see that volume trends in the last few years haven’t been favorable for the marketplace, especially for those firms that rely on volume for revenue. Most brokers have gone through downsizing and firms like Getco certainly do thrive under higher-volume environments.”
While the review examined business units across the company, job cuts weren’t made in all groups, according to the person. Some units continue to expand including client services, the person said. Coleman, who joined Getco in 2010 after serving as global head of equities at Zurich-based UBS AG, has sought to extend the company’s trading services to mutual funds and other asset managers. The company offers a strategy, or set of algorithms, called GETAlpha designed to help institutions save money and minimize their impact on prices as they trade.
Getco, a high-frequency-trading specialist founded in 1999, is a market maker on more than 50 exchanges and platforms globally in equities and options, fixed income, commodities and currencies. Founders Stephen Schuler and Dan Tierney remained on the board after Coleman’s promotion.
The growth of Getco’s business servicing asset managers followed its decision in 2010 to become a so-called designated market maker on the New York Stock Exchange. The company agreed to buy Bank of America Corp.’s NYSE market-making business last year. It created its the Getco Execution Services dark pool, now called GETMatched, in 2008. Dark pools are private venues that match orders without displaying bids and offers in advance.
Stock volume has shrunk this year, dropping to an average 6.81 billion shares a day in the U.S. versus 7.80 billion in 2011, 8.52 billion in 2010 and 9.77 billion in 2009, according to data compiled by Bloomberg on exchange-listed securities.
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