Financial information group Reuters has reported its biggest ever loss and announced it is to cut 3000 staff over the next three years.
Shares in the group fell to a new low after it reported a net loss of £394 million in 2002. Revenue fell by 8% to £3.575 billion but the group's pre-tax profit of £89 million was higher than many market estimations.
The 3000 staff cuts announced, 2000 more than anticipated, are in addition to the 2,500 the group has laid off in the last two years.
The group expects a decline in recurring revenues of 9 per cent in Q1 2003 and forecasts the decline to be higher in Q2.
Restructuring charges are expected to total £340 million over the next three years.
In order to reduce costs and streamline operations, Reuters has announced a five point plan that it says will result in annualised cost savings of £440 million by the end of 2005.
As part of the plan Reuters says it will make its cost base significantly smaller and more scaleable, invest in new content to enhance product lines and move to a single product delivery system to lower costs and improve service. In addition, the group plans to increase revenues by selling more tailored products, with its solutions business focussing on its core strengths of risk management, content management and treasury products.
Tom Glocer, Reuters CEO, says: "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."
Despite the results Reuters has announced it is acquiring New York-based financial information vendor Multex for an estimated cash price of $195 million.
Multex provides financial information on over 25,000 active companies worldwide and earnings estimate data on over 16,000 companies in 60 countries. Reuters currently owns 6% (1.94 million) of Multex's 32.5 million outstanding shares and the firm's senior management, who own approximately 5% of Multex not including options, have committed to support the deal.
Glocer says Multex will play an important part in the groups 'fast forward' plan.
"We plan a quick and full integration that we expect to yield cost savings within both organisations and that will enable us to take Multex's business to scale with the help of Reuters global distribution infrastructure," he adds.
Isaak Karaev, chairman and CEO of Multex, will become president of Reuters' investment banking and brokerage division after the acquisition closes.