Slowed trading activity was behind Fiserv Inc.'s recent decision to close offices and lay off or reassign one-third of the people in its securities processing group, the company said.
Contributing to the slowdown was the loss of Citicorp Investment Services as a customer of Fiserv's correspondent services unit. That unit is to be merged with with Fiserv Securities Inc., the Brookfield Wis., data processor said Wednesday. As a result, 300 of the unit's 900 jobs will be lost or reassigned as offices in Denver and Boca Raton, Fla., are closed.
Looming large in that decision was the recent slowdown in trading activity, said Bob Beriault, president and chief operating officer of Fiserv Securities Group. "The job reductions and reassignments are the product of trading volume being down," he said.
The loss of one of its largest customers did not help Fiserv's situation. Today, Citicorp Investment Services in Long Island City, N.Y., will begin transferring broker clearing responsibilities from Fiserv to its sister firm, Salomon Smith Barney Inc. Fiserv had been executing orders and other clearing and maintenance functions for Citicorp Investment customers for more than a decade.
"The decision was made to put the best resources together and broaden the product base of both companies and go forward from there," said Larry Donato, the president of Fiserv Securities. "This makes a much stronger marketing presence, and bringing the talent together from two different platforms makes a consolidated, stronger unit, as opposed to each having its own niche."
The job cuts were mostly a result of the consolidation, he said, but a loss as big as that of Citicorp Investment is "a factor in the same way that market conditions are a factor." Fiserv does not disclose the volume it gets from any single customer, but Citicorp Investment's was "on the larger end," Mr. Donato said.
The integration of the correspondent services unit should be completed by September. …