Thomson Reuters to Cut 3,000 Jobs to Focus on Growth MarketsEdmund Lee
Thomson Reuters Corp., a provider of news and information services, plans to cut 3,000 positions, or about 5 percent of the workforce, in a bid to focus on growth markets and boost profitability.
The announcement followed higher-than-projected earnings at Thomson Reuters, which is trying to rebound from a lingering slump on Wall Street brought on by the financial crisis and recession. Excluding some items, the company posted profit of 48 cents a share for the third quarter. That beat the 44 cents estimated by analysts, according to data compiled by Bloomberg.
The job cuts will mainly affect the financial and risk division, the company’s biggest unit, and follow a move to eliminate 2,500 positions earlier this year. Thomson Reuters Chief Executive Officer Jim Smith, who took the top job in January 2012, has been increasingly relying on cost cutting to improve profitability. The previous round of firings, announced in February, trimmed about 4 percent of the workforce.
“We will pick up the pace of efforts to simplify and streamline our organization, to shift resources behind the most promising growth opportunities,” Smith said today in a statement.
Thomson Reuters competes with Bloomberg News parent Bloomberg LP in selling financial data and news services.
The New York-based company also announced plans to buy back as much as $1 billion of its stock by the end of 2014.
Thomson Reuters shares rose as much as 3.2 percent to $36.88 in New York, the biggest intraday increase in more than seven months. The stock had already climbed 23 percent this year through yesterday.
Third-quarter net income attributable to common shareholders fell 39 percent to $271 million, or 33 cents a share, from $441 million, or 53 cents, a year earlier. Operating profit, which excludes one-time items and businesses that have closed, declined 15 percent to $316 million in the period.
The company said it has now installed more than 100,000 Eikon desktop terminals, which customers use to access market analysis and trading software. Thomson Reuters also has shifted clients away from its Bridge Data Network, allowing it to close its third legacy platform this year.
Revenue from ongoing businesses rose 2 percent to $3.07 billion. The company expects percentage growth in the low single digits this year, unchanged from an earlier estimate.
“Though we continue to expect challenging conditions in the coming quarters -- particularly with the largest global banks -- these are significant steps in returning our financial business to a growth footing,” Smith said.