Big Board to Trim Payroll 18% Over Next Few Weeks

In a sign that the leading symbol of American capitalism isn’t immune from recessionary pressures, the New York Stock Exchange said Friday that it will slash its work force by about 18% over the next few weeks through layoffs, early retirements and attrition.

The exchange said it will reduce its staff to about 1,600 employees from the 1,950 on the Big Board’s payroll at the beginning of last year. Exchange spokesman Richard Torrenzano said the staff reduction of roughly 350 includes “almost” 100 people who elected to take early retirement.

He refused to say exactly how many employees will be laid off or specify the types of jobs that will be eliminated. But he said the layoffs will be “exchange-wide,” adding that the staff reductions will include “a lot of attrition.” The NYSE also said it plans to “significantly reduce” other costs as well, but exchange officials declined to give specifics.

The exchange derives its income from a variety of sources, including fees for listing stocks, trading fees and fees based on member firms’ gross revenues. The securities industry has been in a deep slump since the 1987 market crash, and many brokerage firms have said 1990 was their worst year since the early 1970s. The exchange also faces growing competition from computerized off-exchange trading and from foreign securities exchanges.

The exchange called the staff reductions a “competitive repositioning” made possible by its $600-million investment over the past decade in computerized trading systems.

“Clearly, the human element and the professionalism of the staff is an important part of the process,” Torrenzano said in an interview. “But it’s also important to be cost-effective and efficient, and we think we have the ability to move in this direction.”

Torrenzano denied that the moves were in response to any unforeseen budget crisis and said the Big Board’s budget projections are “very much on target.”

In a written statement, NYSE Chairman William H. Donaldson said: “We have tried to be judicious and fair in attempting to balance the need to reduce expenses and enhance our long-term competitive position against the important contribution made by each staff member.”

Torrenzano didn’t rule out the possibility that the layoffs may include senior executives as well as staff of the exchange’s market surveillance unit. In response to complaints by regulators of widespread insider trading and other irregularities, the NYSE in the late 1980s substantially beefed up the unit, which monitors trading minute-by-minute for signs of improprieties. Torrenzano said the exchange will be “consulting with the various regulatory agencies” about the impending layoffs.