Saxo cuts jobs amid slowdown in activity
Saxo Bank, the leading online FX broker, has announced plans to cut more than 250 jobs as a result of subdued trading activity from its retail client base.
Reports on Tuesday, confirmed by EuromoneyFXNews, say Denmark’s Saxo is laying off 266 of its 1,513 employees, mainly at its Copenhagen headquarters. The news comes as declining volatility has depressed trading volumes across the FX industry. That has led to spread compression, increasing competition and driving down margins among leading retail FX brokers.
Saxo’s net profit fell 88% in the first half of 2012. The bank said, with the macro-environment characterized by continued low growth and uncertainty driven by the eurozone debt crisis, the potential risk of a breakdown of the euro had put a damper on investors’ market activity.
It also blamed central bank intervention from the Bank of Japan and the Swiss National Bank for the decline in investor interest and falling trading volumes.
The drop in trading volumes occurred even as client deposits at Saxo rose by nearly 30% from DKr23.284 billion to DKr30.223 billion compared with the first half of 2011.
Indeed, Kim Fournais, co-founder and joint CEO at Saxo, told Reuters in a recent interview that the bank had never had as many clients, but that customers had never traded as little as they do.
Saxo Bank is present in more than 20 countries, with local offices throughout Europe, Asia, the Middle East, Latin America and Asia.