Thomson Reuters Cuts 2,000 Jobs Worldwide in RestructuringBy
Will take cost-cut charge of up to $250 million this quarter
Profit exceeds estimates as subscription business improves
Thomson Reuters Corp. is eliminating 2,000 jobs worldwide as the news and information provider restructures to focus on growth areas like its risk and legal units.
The company will take a fourth-quarter charge of $200 million to $250 million, mostly in its enterprise, technology and operations group, as part of the cuts, according to a statement Tuesday. The resulting savings are projected to be of “a similar magnitude” to the charge, it said. The shares jumped as much as 5.5 percent, the biggest intraday gain in more than 5 years. It traded up 4 percent to $41 at 10:53 a.m. in New York.
Thomson Reuters has about 50,000 employees, according to a company spokesman. So the cuts, disclosed in an e-mailed statement, will affect about 4 percent of its workforce.
In an earnings call, Chief Executive Officer Jim Smith cited “a more challenging revenue environment than we had expected at the start of the year” and said the charge “allows us to significantly simplify the business and deliver more value to customers.”
The cuts come even as Reuters reported third-quarter profit that beat analysts’ estimates as its core financial subscription businesses improved, bolstered by growth in the Americas.
Earnings excluding some items rose 20 percent to 54 cents a share, the New York-based company said in the statement. That compared with the 47-cent average of analysts’ estimates compiled by Bloomberg. Revenue from continuing operations was $2.74 billion, slightly below analysts’ projections for $2.75 billion.
Smith and Chief Financial Officer Stephane Bello are relocating to Toronto, the company said last month as it expands its Canadian operations with a new technology center in the city. Thomson Reuters, which provides news, data and analytics to the financial industry, law and accounting firms, corporations and governments, in April forecast revenue growth of as much as 3 percent for the year, excluding discontinued operations.
Thomson Reuters agreed in July to sell its intellectual property and science operation to private equity firms for $3.55 billion. It plans to use proceeds to buy back shares, repay debt and reinvest in its businesses, including financial, compliance and tax products, according to Bloomberg Intelligence.
- Sales at the financial division, the company’s largest, rose 1 percent to $1.52 billion. The unit’s adjusted earnings before interest, taxes, depreciation and amortization increased 10 percent, or 7 percent before the effects of shifting currencies.
- Revenue was little changed in the legal unit and gained 6 percent in the tax and accounting division. Adjusted Ebitda fell 1 percent in the legal unit and climbed 9 percent in the tax division before adjusting for currency moves.
Bloomberg LP, the parent company of Bloomberg News, competes with Thomson Reuters in providing news and information.