Tullett Prebon To Cut 80 More Jobs

The City broker Tullett Prebon plans to cut another 80 jobs against the backdrop of a "challenging market" and rising staff costs.

The broker announced 80 job cuts two months ago and said on Tuesday it expected to axe as many again, mainly in back-office roles. The cuts will be spread across Europe, Asia and America.

"Actions have been taken to reduce costs and to maintain flexibility in the cost base, although the business does face increased costs relating to electronic platform developments and impending regulatory changes," the chief executive, Terry Smith, told Reuters.

Reporting flat revenues for 2011 and a drop in profits, the firm highlighted cost pressures from broker pay. It said the rising pay costs reflected "the highly competitive market for brokers and the significant investment that has been made in rebuilding the business in the Americas".

Tullett's shares were down almost 3% at 320.3p in mid-session trading after it reported revenues of £910.2m, compared with £908.5m in 2010. Underlying profit before tax was £136.1m, down from £149m in 2010.

Smith noted a choppy outlook: "Market and competitive conditions are expected to continue to be challenging. The world's financial markets remain unsettled, however, and it seems reasonable to expect that there will be some periods of market volatility and heightened activity during 2012, as well as periods of more subdued activity."

Tullett's job cuts plan follows similar cost-cutting news last month from the rival broker Icap, which said in a trading update that it was reacting to the eurozone crisis and an uncertain global outlook.

Commenting on Tullett's results, analysts at Singer Capital Markets said: "This is a good result given the challenging markets faced during 2011 with overall market activity having been lower, reflecting continued investment in the business … The shares remain cheap and continue to trade on a sizeable discount to Icap despite delivering a substantially better return."

This article was written by Katie Allen, for guardian.co.uk on Tuesday 6th March 2012 12.19 Europe/London