Reuters is accelerating its cost-cutting strategy, which has already seen it slash its workforce by 1,100 in July. The company today said it is to lose a further 500 staff, as it attempts to save an extra £30m a year as a result of the terrorist attacks in the US and its impact on trading conditions.
The company slashed its growth forecast in July to 10%, but warned today that it is unlikely to meet this target as customers continue to review their spending programmes in the wake of the terrorist attacks.
Group third-quarter revenues rose just 4% to £920m, as a strong performance at Reuters Financial was offset by weak results at Reuterspace and Instinet.
Reuters Financial revenues climbed 5%, Reuterspace revenues fell 5% and Instinet revenue fell 1% to £187m.
Instinet lost £12m in revenues when the markets closed for four days following the terrorist attacks on September 11. Reuters Group lost £4m as a direct result of the attacks. The company also lost six members of staff in the attacks in the US.
Reuters aims to save £170m next year and £220m in 2003. It is attempting to reshape the business to achieve sustainable, double-digit earnings growth and operating margins of 17%-20% over the next five years.
Tom Glocer, the recently appointed chief executive, said, "We have delivered sound results given difficult trading conditions. More importantly, we are taking the tough decisions needed to improve our operating margins in the near term and position ourselves for stronger growth when the markets recover."
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