Cuts in works at Thomson Reuters

Management layers, real estate offices targeted

plans to shrink the number of management layers and real estate offices at the organization by one-third as it also eyes “fewer, larger acquisitions.”

With the sale of a majority stake in its Financial & Risk unit — which included its financial terminal business — to the Blackstone investment group completed last month, there is “an opportunity to fundamentally reset the organization,” said its chief executive Jim Smith.

This repositioning includes a “flatter organization” for the news and information provider as it moves to drive revenue growth organically and via acquisitions, he told analysts on Tuesday.

“We are now in a position to play offence ... We are aggressively moving forward by rolling out a new organizational structure and executing on our strategic plan to hit the ground running on January 1,” he said on a conference call discussing the company’s latest quarterly earnings.

Smith’s comments come as Thomson Reuters reported its third-quarter profit fell compared with a year ago, as its revenue edged higher.

The news and information company, which keeps its books in U.S. dollars, earned a profit attributable to shareholders of US$261 million or 37 cents per share for the quarter ended Sept. 30.

The result compared with a profit attributable to shareholders of US$330 million or 46 cents per share in the same quarter last year. Revenue totalled US$1.29 billion, up from US$1.27 billion in the third quarter of 2017.

On an adjusted basis, Thomson Reuters says it earned 11 cents per share, down from an adjusted profit of 27 cents per share in the same quarter last year.

Analysts on average had expected a profit of three cents per share for the quarter, according to Thomson Reuters Eikon.

Smith told analysts on Tuesday that its profit margin was down due to factors such as higher corporate costs related to the Blackstone transaction but Thomson Reuters is on track to deliver a “solid year and an even better 2019.” He pointed toward a goal of mid-single-digit revenue growth for the new Thomson Reuters.

Thomson Reuters completed the sale of a 55 per cent majority stake in its Financial & Risk business to a group led by the Blackstone private equity firm and including the Canada Pension Plan Investment Board on Oct. 1. The deal valued the business at roughly US$20 billion, and Thomson Reuters received roughly US$17 billion in cash.

Thomson Reuters retains a 45 per cent stake in the financial and risk business, which now operates under the name Refinitiv.