Thom­son Reuters to lay off 3,200 in next two years amid cost-cut­ting

Business World - - Labor & Management -

TORONTO — Thom­son Reuters Corp., said on Tues­day that it will cut its work force by 12 per­cent in the next two years, ax­ing 3,200 jobs, as part of a plan to stream­line the busi­ness and re­duce costs.

The news and in­for­ma­tion provider, which com­pleted the sale of a 55-per­cent stake in its Fi­nan­cial & Risk (F&R) unit to pri­vate eq­uity firm Black­stone Group LP, an­nounced the cuts dur­ing an in­vestor day in Toronto, in which it out­lined its fu­ture strat­egy and growth plans.

The com­pany, which is fo­cus­ing on its le­gal and tax busi­nesses fol­low­ing the Black­stone deal, de­clined to say where the job cuts were be­ing made. How­ever, Co-Chief Op­er­at­ing Of­fi­cer Neil Master­son told in­vestors that staff had al­ready been in­formed about 90 per­cent of the planned cuts.

Shares in Thom­son Reuters rose as much as 3.7 per­cent on Tues­day, hit­ting an all-time high.

“They laid out some good plans for the next cou­ple of years,” said Ed­ward Jones an­a­lyst Brit­tany Weiss­man. “I think there is still a long road ahead, but it was pos­i­tive. They ex­plained in more de­tail the path­way to more or­ganic growth.”

The com­pany aims to grow an­nual sales by 3.5 per­cent to 4.5 per­cent by 2020, ex­clud­ing the im­pact of any ac­qui­si­tions. Chief Ex­ec­u­tive Of­fi­cer Jim Smith said it plans to cross-sell more prod­ucts to ex­ist­ing cus­tomers and to at­tract new cus­tomers. The com­pany will also cut the num­ber of prod­ucts it sells, he said.

“We’re go­ing to sim­plify the com­pany in ev­ery way that we can, work­ing on sales ef­fec­tive­ness and on ways to make it eas­ier both for our cus­tomers to do busi­ness with us and for our front­line troops to nav­i­gate in­side the or­ga­ni­za­tion,” he said.

As part of the stream­lin­ing, the com­pany said it planned to re­duce the num­ber of of­fices around the world by 30 per­cent to 133 lo­ca­tions by 2020.

Fol­low­ing the Black­stone deal, about 43 per­cent of Thom­son Reuters rev­enues come from its le­gal busi­ness, with 23 per­cent of sales com­ing from cor­po­rate clients and 15 per­cent of sales com­ing from its tax busi­ness.

Reuters News ac­counts for only 6 per­cent of sales but Mr. Smith said it re­mained a key part of the busi­ness un­der Michael Frieden­berg, who joined the com­pany on Mon­day as pres­i­dent of its news and me­dia op­er­a­tions.

“We be­lieve he can make Reuters News an even greater part of our growth story go­ing for­ward,” Mr. Smith said.

Thom­son Reuters set a tar­get to re­duce its cap­i­tal ex­pen­di­ture to be­tween 7 per­cent and 8 per­cent of rev­enue in 2020 from 10 per­cent cur­rently.

The com­pany has set aside $2 bil­lion of the $17 bil­lion pro­ceeds from the Black­stone deal to make pur­chases to help grow its le­gal and tax busi­nesses.

Shares in Thom­son Reuters have risen by 40 per­cent since May, ben­e­fit­ing from the com­pany buying back $10 bil­lion worth of shares. —

REUTERS

THE BAY ADE­LAIDE CEN­TRE, which houses Thom­son Reuters ex­ec­u­tive of­fices, is seen in Toronto

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