The New York Mercantile Exchange wants to cut up to a quarter of its work force as it slashes expenses ahead of a much-anticipated initial public offering.
The exchange, which has nearly 550 full-time employees, spent $37.5 million on salaries and benefits during the first half of 2006, a 25 percent increase from the same period in 2005, reports the New York Post. The newspaper says Nymex told employees last week they had five days to decide whether they want to apply for a pre-arranged buyout package before the exchange begins layoffs. Sources told the Post Nymex hopes at least 50 people will take the buyout package, which includes a payment of up to four weeks salary per year of service plus health benefits for six months after they leave.
However, the buyout payments are capped at 1.5 times current salary. "If you've been here for over 30 years and are making $50,000 a year, you won't get more than $75,000 in the buyout," one source told the Post. "That's kind of a raw deal for someone who put in that much time."
Some exchange members say its cost structure is bloated with "excess fat" in nearly all departments including marketing, accounting and compliance, the Post said.