* Cuts 133 staff, or 12 percent of total number of employees
* Expects annual savings of 11 million pounds
* Says market conditions remain challenging
(Writes through, adds detail)
By Daisy Ku
LONDON, Sept 24 (Reuters) - The London Stock Exchange said it had cut 133 staff, or 12 percent of its workforce, as its new chief executive makes his mark and steps up efforts to reduce costs as market conditions stay tough.
"We continue to take actions to ensure the group is well placed to compete and develop," Chief Executive Xavier Rolet said on Thursday.
Rolet will outline his business development plans for the first time since taking over the helm in May in an analyst briefing later on Thursday.
The LSE said the reduction in headcount in Britain and Italy will provide cost savings of 11 million pounds ($18 million) per year, starting from the second half of the financial year ending March 2010.
Rolet said market conditions remained challenging but the group continued to see good levels of activity in many parts of the business.
At the end of August terminals taking live UK pricing fell to 94,000 from 104,000 at the end of March. In Italy, terminal numbers were down to 142,000 from 145,000 in March.
By 0728 GMT LSE shares were down 2.7 percent at 855 pence, underperforming a 0.7 percent fall by the benchmark FTSE 100 share index.
With additional cost savings from switching to MillenniumIT's low latency trading platform, the group will see a total cost savings of 21 million pounds starting the financial year ending March 2012, representing 6 percent of its total costs of 332.8 million pounds in the last financial year.
To achieve such cost savings, the LSE will take a one-off charge of 32.5 million pounds in the first half of its financial year. ($1=.6108 Pound) (Editing by David Holmes and Jon Loades-Carter)