ITG Announces Cost Reduction Measures
ITG (NYSE: ITG), a leading execution and research broker, today announced a plan to reduce operating costs in the face of continued weakness in institutional equity trading volumes. This cost reduction initiative is designed to improve financial performance while maintaining ITG's competitiveness and high standards of client service. This plan stems from a comprehensive review of ITG's various business activities, benchmarking ITG's cost structure against industry peers. The cost reductions are primarily focused on headcount, market data and other general and administrative costs across ITG's businesses.
"Given the difficult business environment, we examined every aspect of our cost structure across all businesses and geographies," said ITG's Chief Executive Officer and President, Bob Gasser. "While the staff reductions were a difficult decision, they are a necessary step to ensure the long-term competitiveness and profitability of ITG. These reductions will not impair our ability to capitalize on any future improvements in global trading volumes."
The reductions reflect in part the impact of improved efficiencies from recent investments in product and infrastructure as well as secular changes in the business environment. This initiative is expected to generate pre-tax cost savings of approximately $20 million in 2013, or $0.32 per share after taxes. Most of the cost savings will begin to take effect during the first quarter of 2013. ITG will incur pre-tax charges associated with this plan estimated at $8.5 million, or $0.14 per share after taxes, in the fourth quarter of 2012.
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