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Last Updated: Tuesday, 5 August, 2003, 04:21 GMT 05:21 UK
Reuters to shift core unit to India
Financial information
News and financial information provider Reuters is planning to move much of the core of its operation to India in an attempt to save money.

The move, unveiled on 28 July in a simultaneous presentation to 1,100 staff worldwide will see new products being developed at either Hyderabad or Bangalore.

But as made clear in documents seen by BBC News Online and distributed at the worldwide presentation to the content division - the section which generates the financial data Reuters sells to banks and other key customers - the move will almost certainly involve redundancies.

Among staff affected are 350 based in Tiverton in south-west England, another 65 in Edinburgh in Scotland, as well as a further 600 or so in New York and White Plains in the US, Singapore in East Asia, and in several other offices around the world.

The content operation supplies the data which appears on Reuters screens used by investors.

The company makes most of its money from the screens, rather than from selling news to papers and broadcasters, so the content division is at the core of the company.

Many companies are shifting call centres and other ancillary divisions to India to save money, but a shift of core operations is more rare.

Competition

Reuters sources told BBC News Online that the announcement was already hitting morale, and that some staff are already planning to jump before they are pushed.

The documents generated for the 28 July meeting suggest the company is making contingency plans for large-scale redundancies in the wake of the announcement.

In them, the company insists it has no choice but to save money with the switch to India, in order to remain competitive.

The content division was recently swelled by the acquisition of data company Multex.

Staff who had joined Reuters from Multex were told at the Fast Forward day that their jobs were safe.

But BBC News Online has heard that within days, senior managers in the content division were being told that this was not the case.

Turnaround

Reuters is in the middle of a 3,000-staff redundancy and cost-cutting programme dubbed Fast Forward, outlined at a company-wide day of meetings on 11 July.

A Reuters spokeswoman said that no decision had been made yet on what, if any, functions would move to India to supplement the new products to be developed there, but that an announcement would be made by mid-September.

Any job losses, she said, would be included in the 3,000 already planned into Fast Forward.

The Fast Forward programme is an attempt to keep up with the burgeoning sales of competitors Bloomberg and Thomson Financial - both of whom claim their data is more accessible to users.

Reuters pulled itself back to profit in the first six months of 2003.

But it warned that sales of subscriptions for data were down 10% on the previous year - and that another two years of tough times still lay ahead.


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