Knight Capital Group (NYSE: KCG) announced this week is in the process of cutting roughly 5% of its workforce. The cuts will not have any impact on Urban Financial Group, according to sources within the company.
Knight agreed to be acquired in late 2012 by trading peer Getco LLC and the employee cuts are a result of a corporate restructuring in an effort to lower operating expenses and improve financial performance.
The deal is expected to close in the first quarter of 2013.
The company experienced an unprecedented loss due to an electronic trading glitch in 2012 that left Knight nearly bankrupt. Due to a Wall Street bailout by trading partners including Getco, Knight remained solvent and reportedly received acquisition offers from Getco as well as Virtu Financial before agreeing to a deal with Getco valued at $1.4 billion.
Knight’s reverse mortgage arm, Urban Financial Group, has remained a profitable business segment, according to company executives in its latest SEC filings. However, recent reports indicate Knight is in the process of seeking a buyer for its fixed income units including Urban.
Written by Elizabeth Ecker