A little over a month ago, the big boys over at NYSE said they would cut over 500 positions, with a planned 400 employee lay-offs and terminating about 120 contractors. This 15%-16% cut in headcount makes sense, and I suppose there will be more to come in the coming year. NYSE still has too many heads compared to other exchanges like LSE, NASDAQ and others.
So what should you expect? Well, with so many lay-offs you can expect a drop in their earnings this quarter. All the severance pay will take a hit to their profits by year-end. Don't panic yet. With lower staff levels, they'd also realize cost savings for 2007. So in someway it balances off. Regardless, NYX is still over-priced at the moment. Their merger with Euronext should be over with by the 19th or something of this month. I think that's still causing a lot of the build up in optimism, but really shouldn't. They have ranged between 48.22 and 112, standing dangerously at 95+ now. Don't forget that after three years of happy times for the NYSE, and generally a recovery in the economy, it's got to peak sometime, like now. Their price should come down to 70 at the very least.