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Thursday, 20 June, 2002, 17:51 GMT 18:51 UK
Reuters aims job cuts at senior ranks
Reuters logo
Financial information giant Reuters, undergoing a shake-up to support revenues, is taking its jobs axe to senior posts.

The data provider said it was to shed 650 senior and middle managers.

Tom Glocer
Tom Glocer: Committed to margin targets
The cuts comes on top of the 1,600 job losses announced last year by the firm, which has axed its financial TV arm.

Reuters said the fresh cuts were being implemented to help "accelerate" a business shake-up which has this year seen the firm revamped around a four-unit structure.

But the announcement failed to bolster investor confidence in Reuters, which saw its shares hit an eight-year low on Thursday.

Opportunities

The latest cuts would lead to cost savings of 100m a year, on top of the 235m claimed for changes already announced, the firm said.

And the loss of management tiers would "increase the speed of decision making", besides providing opportunities for a "new generation of executive talent", a statement on Thursday added.

The company also restated that it was on target to achieve a core operating margin of 12%, if an 80m restructuring charge was excluded.

"The accelerated cost savings initiatives we announce today will improve our 2003 margin beyond 12% in advance of a general market recovery," chief executive Tom Glocer said.

"We remain committed to our long term margin targets."

City fears

The announcement failed to reassure analysts, who said the shake-up was a sign of lingering weakness in Reuters' markets.

Bad day for media investors
Reuters: -13.9%
Granada: -5.8%
Daily Mail: -3.4%
Pearson: -4%

Data: 1500 GMT

"They're having to cut additional costs to stand still," Michael Picken of investment bank Credit Suisse First Boston said.

Fund manager Gerrard said: "Reuters' markets are continuing to worsen, and as such the company is being forced to act more aggressively to reduce costs."

Reuters shares plunged 13.9% to 347.5p, their lowest level since at least August 1993.

Stock in other media firms fell in sympathy, with Daily Mail, Granada and Pearson shares all showing strong declines.

See also:

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