Pacific Stock Exchange Fires 31, Will Cut Other Expenses
The Pacific Stock Exchange said Monday that it will lay off 31 people and significantly cut other operating expenses in an effort to stem losses caused by a steep decline in trading volume.
The San Francisco-based exchange said its options volume is 24% below 1989 levels and equities trading volume has fallen 8% this year. Moreover, the value of stocks traded, which is the basis for the exchange’s transaction revenue, is down 15%.
During the first nine months of 1990, the exchange has lost more than $1 million, said Dale A. Carlson, an exchange spokesman. Year-end results are not yet available.
The moves by the PSE were just the latest in a series of cutbacks to hit the U.S. securities industry in recent months. Nearly every major Wall Street firm has announced severe layoffs this year as the result of declining stock prices, falling trading volume and a moribund mergers and acquisitions market.
In fact, PSE Chairman Lee Korins maintained that the exchange, which operates trading floors in San Francisco and Los Angeles, has actually fared better than some competing exchanges and Wall Street brokerages. But he said the cost-cutting moves were necessary because “the realities of the 1990s dictate lean, efficient operations.”
Four Los Angeles workers and 27 in San Francisco, or about 7% of the work force, have already received notice of the layoffs, Carlson said. The exchange expects to lose another 10 positions as the result of attrition over the next year, and about half a dozen open positions will not be filled, Carlson said.
“I don’t know of any department in the exchange that has not been affected by this,” he added.