Dutch market maker Van der Moolen Specialists is cutting 30 percent of its U.S. workforce as the New York Stock Exchange shifts all of its listed securities to a hybrid trading model.
Van der Moolen said the staff cuts will result in a one-time charge of around $1.3 million in the first quarter of 2007. The firm expects an annual saving of around $4.5 million as a result of the job reductions.
"This is a difficult decision, but one which is necessary for VDMS due to implementation of the NYSE hybrid market and more automation at the point of sale," said chief executive Richard den Drijver.
Van der Moolen reported a loss of $46 million in the third quarter because of costs related to job cuts and declining revenue at its U.S. specialists unit.
The Dutch firm is the latest to cut floor staff in response to increasing use of electronic trading. Last week, Bank of America's specialist business laid off 40 NYSE employees and said 20 to 40 more jobs may be cut.
Lehman Brothers laid off its entire six-member floor-based Direct Market Access staff. Goldman Sachs laid off nine people on the trading floor and is planning to shut its Direct Access unit by March.
Earlier this month, the NYSE asked the Securities and Exchange Commission to postpone implementation of Regulation NMS, a new market-reforming regulation that mandates brokers to execute trades at the best price, by a month to allow the exchange more time to roll out its hybrid trading system.
The NYSE is currently rolling out phase three of its hybrid trading system, which blends electronic trading with traditional execution made by floor brokers. The Big Board planned to have completed phase three rollout by December. The rollout is now expected to be completed by the end of this month. The rollout of phase four, which includes the NMS order types, is expected to be completed by the end of February.