Cyprus has become synonymous as a veritable hub for FX firms, and despite surviving a somewhat disruptive banking crisis last year, the FX industry on the island appeared to recover quickly, with very few minor obstacles in its path which have been largely overcome.
Almost a year on, relative silence reins, giving weight to the old adage that no news is good news, however today Forex Magnates discovered that Easy Forex has begun a reduction in its headcount, letting go of a series of staff members, echoing a similar action by compatriot FXGM in April last year when it restructured its sales team, involving the redundancy of its entire English-speaking desk.
According to one particular source who asked to remain anonymous, “Easy Forex has made seven employees within its Cyprus operations redundant. Business is down, as are volumes, and things do not look good.”
A dramatic claim indeed, to which Chief Marketing Manager of Easy Forex, Hillik Nissani, answered that: “This is a focus thing.” In an interview with Forex Magnates, Mr. Nissani confirmed the move and explained that, “This is part of a process that every healthy company that wants to accelerate its growth is doing – focusing its resources in the places that generate the most profits. We are just making sure we have the right people in the right places.”
Mr. Nissani went on to explain that what he describes as “corporate focusing” by letting these employees go is far from indicating a negative aspect of the firm’s business. It is rather a part of a commercial streamlining effort insofar as, “We have a lot more open positions than the number of people who left, only these are in different offices and roles in which we need them.”
As far as regional emphasis is concerned, Mr. Nissani confirmed that the need for Easy Forex to support its important Chinese client base is paramount. “We have opened two offices in China this year, one for marketing purposes in Shanghai, and another one in Guangzhou, upon which more details will follow in a few weeks.”
Easy Forex confirmed to Forex Magnates that the team which has been established in China is growing and further resources in marketing and business development are required. Mr. Nissani’s sentiment follows that of a conversation two years ago between myself and a CEO of a similarly positioned retail FX firm, in which it was divulged that 30% of Easy Forex’s business comes from mainland China.
In order to gain further perspective of Easy Forex’s motives for carrying out these redundancies, Forex Magnates extended its research toward independent industry sources with internal knowledge of Easy Forex’s operations, one of whom explained that the firm’s internal decisions had hampered its progress in certain respects.
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“It definitely was an area in which errors were made. At one time, the company had seventy to eighty people on its payroll, and working on the company’s own platform, that was problematic,” stated the source who requested anonymity. “This was unscalable and Easy Forex poured good money after bad,” he further added.
Reins Tightening On Cypriot FX Industry
Whilst many FX firms appeared to brush off the Cyprus banking crisis relatively quickly during the early part of last year, and continue undaunted as major contributors to the world’s retail FX sector, as 2013 progressed, financial institutions in other parts of Europe began to turn their backs on Cypriot entities, including, in some cases, a reluctance to provide FX companies based in Cyprus with bank account facilities.
Easy Forex is a relative stalwart within the FX landscape in Cyprus, having been established in the region for some years, however 2013 was a year of corporate restructure for the firm, which in February made its exit from the US market by withdrawing all of its remaining licenses with the NFA, indicating the permanency of its initiative begun during 2010 when it withdrew its licensing as a Forex Clearing Dealer.
As 2013 progressed, the company furthered its offering by adding options to its set of available instruments, signifying the need to diversify its product range.
Easy Forex provides this via its recently launched dedicated options trading platform, and with the results of this not disclosed by Easy Forex, the costs of entering the options segment can be high and a development period is required. Steven Reiter, CEO and Founder of Sentry Derivatives explained this to Forex Magnates in an interview in October by stating that, “We worked intensively for two years with FX Bridge on additional features to meet our specific requirements and integration needs, and added our own back end for risk management and built additional integration tools.”
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Interestingly, just last week, rival FX firm FXTM erected an advertisement for the hiring of new staff to its operations, angled directly at Easy Forex’s office in Cyprus, with employees having a clear view.
In conclusion, when asked by Forex Magnates during a telephone conversation today, Mr. Nissani explained that, “Although we have let a few people go, we are focusing on the relevant regions and China is a priority. We are seeking to employ further resources there.”
As the Far East becomes a continual region of interest for most retail FX firms, a potential dynamic to follow is whether further firms will look away from the retail FX heartlands of Cyprus, especially as companies wishing to attract a European audience recently canceled their CySec licenses shortly after attaining them, instead opting for Britain’s Financial Conduct Authority regulatory oversight, which is a jurisdiction well recognized and respected by Chinese FX traders.