Toronto — The TMX Group Ltd. has taken the first steps in implementing a business integration initiative that it announced last month: After the markets closed Wednesday, the operator of the country’s largest stock exchange told about 50 employees that their services were no longer required, sources say.
“They were given letters and marched out the door,” said one person with knowledge of the situation. “I haven’t seen any paperwork on the matter.”
Of the 50 employees, which is about four per cent of the TMX Group’s total workforce — at the end of 2015, it employed 1,187 people – it’s understood that about 35 are in its Toronto headquarters and the rest in the regions. The person who spoke to the Financial Post did not known in what areas of the TMX’s operations the cuts have been made. Calls to the TMX seeking a comment were not returned and the TMX did not issue a press release on the matter.
When the business integration initiative was announced on Aug. 3, the TMX said that “the objective of the initiative is to align, simplify and integrate relevant systems and operations to both lower the cost base and make TMX more nimble and adaptive.” A key part of the move to become “a technology driven solutions provider that puts clients first,” was to first become an “integrated TMX.”
The changes made Wednesday seemed to surprise some observers.
“We were not expecting the cuts but they are not from left field,” one analyst noted. “But if an organization is looking for cost savings, getting rid of employees is a good place to start. There are others. Perhaps (the TMX) could outsource more of its technology functions.”
The TMX will give “better guidance” of the cost savings when they release their third quarter financials, he added.
Added another analyst: “One of the mandates has been to generate cost efficiencies and to combine some business, which they recently did with the two clearing houses. They are trying to produce higher returns and higher margins so to that extent I am not surprised.”
The cuts come follow a period of recent changes, including a new
chief financial office (John McKenzie), a new acting president at the
Montréal Exchange (to replace Alain Miquelon) and new senior executives
at NGX. As well there have been cuts in the communications group and
cuts at the senior level of the TSX-Venture. As well, some of the
founding shareholders of Maple Group Acquisition — the group of
financial institutions formed to acquire control in 2012 — have recently
sold some of their holdings. That investment has not generated stellar