Quotron to Cut 16% of Staff Over Next 9 Months

TIMES STAFF WRITER

Quotron Systems, the nation's largest provider of stock price quotations, said Monday that it will fire 400 people, or about 16% of its work force, as it tries to streamline the company in the face of belt tightening in the securities industry since the October, 1987, crash.

The Los Angeles-based company, which has dominated the market since it launched the first electronic stock price quotation system nearly 30 years ago, also is battling intense competition at a time when wild swings of the market are leaving stock traders clamoring for more and faster information.

Quotron will be laying off employees at all job levels and in all of its geographic areas, spokeswoman Ellen Fish said. The company did not reveal how many people will be let go in each office, she said.

Quotron employs about 1,500 people in Los Angeles and 2,500 worldwide, she said. The layoffs will occur during the next six to nine months, she said.

"This action will continue to keep operating expenses in line with revenues in response to changing conditions in the retail securities industry, which has been contracting during the two years since October, 1987," said J. David Hann, Quotron's chief executive.

Quotron controls 50% of the stock quote market with about 100,000 terminals, which can be seen in brokerage offices nationwide.

But Automatic Data Processing of Roseland, N.J., has been catching up and now has about 60,000 terminals. Smaller competitors include Reuters, which has a near lock on foreign exchange quotes, and Telerate, which almost monopolizes the business for bonds and other fixed-income securities.

Some major Quotron clients--primarily Merrill Lynch and Shearson Lehman Hutton--have signed contracts to switch to ADP systems but are still using Quotron as well.

The overhaul at Quotron is not a reaction to those defections, Fish said. "This is a response to overall industry conditions, not in response to individual contracts," she said, adding that Quotron has also lured away some former ADP customers.

Quotron, which is owned by Citicorp, the New York banking giant, does not reveal its financial results. But Citicorp has said the company earned a small operating profit last year.

For the first nine months of the year, Citicorp's information business segment, of which Quotron is the major component, saw its net loss increase 63% to $117 million, its revenues fall 7% to $213 million and its operating expenses rise 17% to $390 million. The business segment's expenses have been rising partly because of business development costs.

"During the past two years, we have committed extensive company resources to improving systems and processes to support our core business, including network backup capabilities, centralized customer support and automated field service dispatch," Hann said. "These investments have all been made to improve the quality of our service and to better support customers."

Quotron will continue its expansion plans, Fish said. They include a soon-to-be-introduced foreign exchange system as well as bond quotes. The company has said it also wants to add customers overseas.

One embarrassing moment for Quotron came Oct. 16, when the market gyrated wildly and for about 30 minutes the stock price quotation system couldn't get the Dow Jones industrial average right. The company insisted that individual stock prices and volume figures were accurate throughout the incident.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World
56°