UK financial news and information provider Reuters Group today announced 1,100 job cuts and stepped up its cost-cutting drive as it signalled slowing growth in its half-year results. The company has an Irish workforce of 30.
The company said it had targeted £85 million in annual savings by 2002, in addition to the £155 million expected to be shaved from the cost base by 2003. Reuters said the extra savings would come partly from the layoffs.
Reuters, which counts the world's major financial institutions among its biggest clients, said it had seen increasing contract cancellations in the first half, which coincided with a big fall in equity markets world-wide.
The job cuts, amounting to about 6.7% of the company's 16,500-strong workforce, represents one of the biggest rounds of layoffs in the company's 150-year history. They follow the announcement of 50 senior management job cuts earlier this year.
'We are accelerating the business transformation programme and taking new actions to drive profit growth in the slower market conditions we expect to continue through the end of the year,' Chief Executive Tom Glocer said in the results statement.
The company reported pre-tax profit down 21% to £357 million, after one-off items, for the six months ended June 30. Revenues were up 14% to £1.94 billion.
Before goodwill amortisation, one-off items and restructuring costs associated with the firm's shift to Internet technology, operating profits of £330 million were in line with market expectations.
The company's recently listed electronic broking subsidiary, Instinet, generated 28% growth in operating profits to £108 million as it grew its US market share. Once again, it accounted for most of the group's profit growth.
The group's main division, Reuters Financial, reported operating profit up 6% to £262 million. The division reported that revenues were up 9% at £1.33 billion.
The company said while it expected to see growth from that division in the second half, the rate would slow as a result of market conditions and weak net orders were likely to impact growth into next year. It expected recurring subscription-based revenues to grow 3% on an underlying basis in the second half, down from five percent in the first six months.
Reuters is now over a year into a four-year plan to spend £500 million to shift its core business onto the Internet in a strategy designed to both cut costs and generate revenues.
