Hedge fund Citadel's securities arm appears to have abandoned plans to become a market maker in treasuries, prompting the company to eliminate several jobs, two people familiar with the matter said.
The Chicago-based firm's Citadel Securities unit already acts as a market maker for stocks and options, and had been mulling plans to branch out into treasuries for several months but recently decided to redirect its resources.
A small number of employees were working on the project in the firm's New York office and the people departed in the last weeks, a person familiar with the matter said.
A spokeswoman for Citadel declined to comment.
The decision to shelve the plans further illustrates the difficulties the unit has faced in the last years as smaller sized brokerage firms are being squeezed on prices and market conditions remain uncertain.
Eager to capitalize off its powerhouse position where the fund oversaw more than $20 billion at its peak before the financial crisis, founder Kenneth Griffin had long hoped to build an investment bank to rival East Coast heavyweights Goldman Sachs and Morgan Stanley and went on a hiring spree.
But turnover has always been high at Citadel's various units and many people initially hired for the unit are no longer there.
(Reporting by Svea Herbst-Bayliss, editing by Bernard Orr)