ITG to Cut Workforce 10% Focus on Current Profitability and Growth Strategy

NEW YORK, NY, December 5, 2002 - Investment Technology Group, Inc. (NYSE: ITG) announced today that it is reducing its workforce by approximately 10% to align its infrastructure with expected levels of trading volume and to position the company for long-term profitable growth.

As a result of these actions, the company will incur a pre-tax charge of approximately $6 million, or $0.09 per diluted share after taxes in the fourth quarter of 2002. The company expects the cuts to result in annualized cost savings of approximately $12 million beginning in 2003.

"These staff reductions are part of our ongoing review of ways to improve efficiency and maintain attractive margins and returns," said Robert J. Russel, ITG's Chief Executive Officer. "In the past year, we have significantly reduced transaction processing and telecommunications costs. Today's announcement recognizes that while ITG volumes have held up much better than the 30-40% decline in U.S. institutional trading volumes, our growth is well below historical rates. The reduced level of staffing will allow us to maintain our high quality of service and execution for clients given the current volume outlook. It also allows us to continue our business development and expansion programs with an even tighter focus on activities that have the greatest growth potential."

ITG is eliminating approximately 70 positions across a number of functions globally, including trading support, software development, and administrative and other support positions. The company believes that the new staffing levels will be sufficient to continue ITG's strategic expansion into overseas markets and the hedge fund market and to maintain ITG's leadership in the development of trading technology.

"I know the entire ITG management team shares my regret in having to say goodbye to friends and colleagues that have served ITG and our customers well during the rapid growth of the past few years," said Mr. Russel.

"The demand for technology-driven, agency brokerage focused on best execution is growing throughout the major global markets" said Mr. Russel. "As a leading provider of equity trading technology designed to improve trading performance and reduce transaction costs, we believe that ITG is well positioned to take advantage of these growth opportunities."

About ITG

ITG is headquartered in New York with offices in Boston, Los Angeles, Dublin, Hong Kong, London, Melbourne, Sydney, Tel Aviv and Toronto. As a leading provider of technology-based equity-trading services and transaction research to institutional investors and brokers, ITG's services help clients to access liquidity, execute trades more efficiently, and make better trading decisions. ITG generates superior trading results for its clients through three lines of business. POSIT, the world's largest equity matching system, allows clients to trade confidentially. The Electronic Trading Desk is recognized as one of the leading program trading operations in the U.S. ITG's leading-edge Client Site Trading Products allow users to implement their own trading strategies by providing direct electronic access to most sources of market liquidity. For additional information, visit

In addition to historical information, this press release may contain "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995, that reflect management's expectations for the future. A variety of important factors could cause results to differ materially from such statements. These factors include the company's ability to achieve expected future levels of sales; the actions of both current and potential new competitors; rapid changes in technology; financial market volatility; general economic conditions in the United States and elsewhere; evolving industry regulation; cash flows into or redemption from equity funds; effects of inflation; customer trading patterns; and new products and services. These and other risks are described in greater detail in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 and other documents filed with the Securities and Exchange Commission and available on the company's web site.

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