[ by Melanie Gretchen ]

Knight Capital Group announced worldwide layoffs as part of a restructuring of its business.  Knight had 1,524 full-time employees at year end, up from 1,423 one year earlier, will eliminate 5% of of its workforce, which amounts to about 76 employees.  The firm's last big layoff was in 2011, when it cut 6% of its workforce - mostly from its voice brokerage business.

Knight recently agreed to be bought by Getco for $1.4 billion.  The sale was precipitated by the firm's August 2012 pre-tax trading loss of $440, which was caused by a trading program error that spit out hundreds of thousands of unauthorized orders.  CEO Joyce made the inappropriate decision to roll out the program even though it had not been fully tested. 

Who will be affected. Knight will be combining its voice and electronic sales teams, and it will wind down its correspondent clearing operations. The firm will take a $9-11 million charge in the first quarter, along with additional costs related to the winding down of the correspondent clearing unit.  However, those costs could not be immediately determined.

Under the reorganization, David Lehmann, head of electronic execution services will leave, as will Steven Sadoff, head of correspondent clearing services.  The institutional equities sales team will be jointly led by Joseph Mazzella, head of institutional equities, and Albert Maasland, head of international.

For further details, go to [CNBC, 2/5/13].