Deutsche Börse cuts 350 jobs to invest €270m in fintech

Deutsche Börse is cutting jobs to spend big on fintech with a €270 million funding plan to invest in blockchain, big data analyses, cloud computing, robotics and artificial intelligence (AI).

There are no specifics yet as the money will be used to “enhance efficiency in the existing businesses” or “boost profits”.

But there is a dark side to all this. 350 jobs will be cut, including 50 managers. The target is to reduce structural costs by around €100 million by the end of 2020.

Deutsche Börse says one-off costs for the programme will amount to approximately €200 million, most of which will be incurred in 2018. Cost savings will create scope for investments in growth and the technologies mentioned above.

But we appear to be switching between light and dark, as it plans to create several hundred new jobs in areas “holding potential for the future”.

This €270 million funding plan follows on from earlier this month, when Deutsche Börse and friends created a fintech acceleration platform.

All of this funding and growth is part of its “Roadmap 2020” strategy, which was unveiled at its annual Investor Day, held today (30 May) in London.

The roadmap will focus on three areas: organic growth, targeted acquisitions, and investments in new technologies.

Theodor Weimer, CEO of Deutsche Börse, says by the end of 2020, he wants it to be a “more efficient company – and a bigger one, with more employees than today”.

Within the scope of its strategy, Deutsche Börse projects net revenue growth from structural opportunities to exceed 5% p.a. between now and the end of 2020. In addition, it anticipates an average annual growth rate for adjusted net profit between 10-15% for the period between now and 2020.

In terms of targeted acquisitions, it names five growth areas, comprising fixed-income securities, energy products, currencies, investment fund services, and data and indices.

Acronyms approach

Staying on the theme of acquisitions, Deutsche Börse also revealed today that it has reached a definitive agreement to acquire GTX’s electronic communication network (ECN) business from GAIN Capital Holdings for $100 million.

With this transaction, Deutsche Börse says its foreign exchange (FX) unit 360T gets access to deep FX spot liquidity. 360T and GTX currently provide FX solutions to over 2,000 clients that operate out of more than 75 countries.

GTX’s ECN business gross revenues were around $23 million last year.