JSE Ltd today announced plans to drive greater efficiencies within in its business to continue to deliver cost-effective solutions to its clients in an industry currently characterised by constant technological disruption and innovation.
Nicky Newton-King, CEO of JSE Ltd says “globally, securities exchanges and other players in the financial services industry are adjusting the way in which they operate in response to changing regulatory requirements and the fast-pace of technological developments. In addition, on a macro-economic level, the country continues to be plagued with low economic growth, rating downgrades and a loss of business confidence. This has negatively impacted market activity.”
“We are focused on preparing the JSE to meet these challenges head-on. The fast moving nature of our business requires us to change the way in which we operate so that we are as nimble and as cost effective as possible. We cannot do so without significantly rethinking our cost base, our operating model and the way we are structured as a business.”
Newton-King says the JSE is refreshing its IT operating structure to align to best practice. “At the same time, our large dependency on IT requires that we look at using technology in a more agile manner to support the execution of our business strategy.”
As part of its ongoing cost optimisations, the JSE plans to reduce its technology operating expenditure by a minimum of R70m over a two-year period. Newton-King says the operational changes will unfortunately also involve a reduction in the company's full-time staff complement by approximately 60 people (14%) this year. Once completed, these initiatives will result in annualised cost savings of nearly R170m which will be fully realised from 2019 onwards. This is in addition to the nearly R65m annualised savings already achieved to date through a combination of removing vacancies and reducing discretionary spend.
“If we want to create a building block for future growth we must take some early decisions and there are none tougher than those that involve our people. We looked at all avenues before considering this action. While we appreciate this will be a very difficult time for the affected employees, the newly aligned company will be in a strong position to serve its current and future clients more effectively.”
Our main priority now is to support our people over the forthcoming weeks as we go through the consultation period,” added Newton-King.
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