Reuters Results Fall In Line With Expectations, Speeding Job Cuts
Although results fell in line with expectations, the expectations had never been particularly good and shares dropped to a low of 704 pence as Reuters announced a 21% drop in first-half pre-tax profits this morning. The group also announced an acceleration in its proposed ‘business transformation programme’, which includes axing 1,100 jobs over the next two years, as part of its interim results.
A drop in spending by its customers, investment banks and the like, due to the currently poor economic climate has led Reuters to re-think its approach and the new plan is to focus on customers rather than products. £300 million was due to be spent on the reorganisation when it was announced in June (see Reuters Restructure Costs 500 Jobs); now Reuters says that £165 million will be spent by the end of this year alone.
Tom Glocer, chief executive, said: “This is a sound set of results reflecting a resilient core business. 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. At the same time, we are establishing a new organisation to focus intensively on our strategic goals and on our customers to drive future revenue growth.”
