Reuters Group Plc, the world's biggest publicly traded provider of financial news and information, will cut 3,000 jobs by 2006 to reduce costs after it posted its first full-year loss since selling shares in 1984.
The net loss last year was UK Pound 394 million (US$631 million), or 28.3 pence a share, compared with net income of UK Pound 46 million, or 3.3 pence, Reuters said in a Regulatory News Service statement. The job cuts, which will lower the workforce by 19 percent, will help save UK Pound 440 million by 2006, it said.
A worldwide slump in stock markets and mergers has prompted securities firms to fire about 100,000 employees in the past two years, reducing demand for Reuters' news and data. Chief executive officer Tom Glocer, who took the helm in July 2001, plans to cut product lines and reduce the workforce to save money.
"By concentrating on Reuters core strength as an information supplier, we can protect and grow market share, differentiate ourselves from the competition and drive profitability," Glocer said in the statement.
The cost-cutting program will cost UK Pound 340 million over the next three years, the company said.
Bloomberg LP, the owner of Bloomberg News, competes with Reuters in providing news, information, and trading systems to the financial community. Bloomberg Tradebook competes with Instinet Group Inc in the business of matching stock trade orders.
Revenue fell 8 percent to UK Pound 3.58 billion. The company expects subscription revenue to fall 9 percent or "slightly" more in the first quarter and to fall more than that in the second.
Six analysts surveyed by Bloomberg News predicted a 2002 net loss of UK Pound 110 million on revenue of UK Pound 3.61 billion.
Instinet Group Inc, in which Reuters has a 63 percent stake, said Feb. 11 that it lost US$112 million in the fourth quarter on lower revenue and increased expenses following the acquisition of Island ECN. Instinet, the largest electronic trader of NASDAQ Stock Market shares, also said it cut 300 jobs, or 17 percent of its workforce, during the quarter.
In the second half, Reuters' loss widened to UK Pound 321 million, compared with a net loss of UK Pound 223 million in the last six months of 2001. Revenue in the period fell 11 percent to UK Pound 1.74 billion from UK Pound 1.95 billion. The second-half figures were obtained by subtracting the first half from the full-year earnings released yesterday.
Reuters shares, down 71 percent in the past year, yesterday rose 2.3 percent to 153.5 pence, valuing the stock at about UK Pound 2.2 billion. When the shares were first listed in 1984, the company had a market capitalization of about UK Pound 700 million, according to the company's Web site.
Separately, Reuters said it will acquire Multex.com Inc for about US$195 million to boost research.
"At a time of structural change in the financial markets, its investment research assets and relationships are particularly attractive," Glocer said in a separate Regulatory News Service statement.
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