Reuters is to cut 650 jobs from middle and senior management as part of a renewed cost-cutting drive aimed at saving an extra £100 million per annum.
Shares in the financial news and information group dipped to a nine-year low as investors took fright at the news. By 10am, the stock had continued its descent, shedding 9% to £3.67, well off its year high of £9.25.
Reuters says it intends to rationalise the group portfolio by extracting synergies from large units (Instinet, Radianz, Tibco and Factiva) and generating proceeds from the disposal of non-core holdings. The job losses are expected to reduce organisational complexity by removing layers of management and "enable a new generation of executive talent to take on more senior responsibilities".
Reuters has been badly hit by the belt-tightening among its core clients in the investment banking business. The latest round of staff cuts are in addition to the targets set in April for 1800 job losses. Reuters says it will incur a restructuring charge of about £100 million for 2002, but expects to save £20 million as a result of the cuts.