U.S. brokerage Knight Capital Group Inc. (KCG: Quote), in a filing on Monday, said it will reduce its worldwide workforce by approximately 5 percent as part of its corporate restructuring, which was aimed to lower operating expenses and improve financial performance.
In connection with the restructuring, Knight expects to incur a total estimated pre-tax charge between $9 and $11 million in its first quarter.
In a filing with the Securities and Exchange Commission or SEC, Knight Capital said that on January 30 it completed the restructuring, which was undertaken in an effort to combine its voice and electronic sales teams and as a result of the winding-down of its correspondent clearing initiative.
The firm has given notification to employees directly affected by the workforce reduction, and they will be provided with severance payments and specified benefits.
According to the company, the charges would include employee severance and other employee benefit costs between $8 and $10 million, and capitalized software write-down of approximately $1 million. It is also expected that cash expenditures will be between $4 and $5 million.
Knight said it expects that there will be additional costs related to the winding-down of its correspondent clearing initiative but such costs cannot be determined at this time.
Knight Capital closed Monday's trading at $3.68, down $0.04 or 1.08 percent.
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by RTT Staff Writer
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