The exchange will decide by year-end which jobs will be eliminated. The cuts of 600 jobs in total will come in phases and are expected to be completed by December 1999.

The pit is expensive and out-of-date, say Liffe customers

At the moment the Futures exchange conducts much of its business through "open outcry" in the "pit", a large hall where traders directly face each other and do deals.

But this centuries-old system of trading is struggling to compete with new competitors like Germany's Deutsche Terminbörse, where all deals are done electronically and online.

During the past two years, Liffe has lost much of its business in Deutschmark futures contracts to its Frankfurt-based rival.

Fierce competition

Hugh Freedberg, Liffe's chief executive, acknowledged that the exchange faced a "fiercely competitive world." He promised that Liffe would deliver its customers "efficiency, ease of access, flexibility and speed" using the "right technology and the right products at the right price."

Fancy jackets are out, fancy computers are in

Liffe's new chairman, Brian Williamson, said in a statement that "it is clear that nothing remotely like our current cost base is sustainable and that we shall have to cut jobs to remain competitive."

He said it was "essential for the exchange to deliver an efficient trading platform together with the products that the customers want at a price they are prepared to pay."

Liffe would now take "an innovative approach to partnerships" with other futures markets, to give customers access to a wider range of products.