Thomson Reuters, in a bid to restructure and further streamline its business, is set to cut down 4% of jobs from its workforce in addition to incurring additional costs of $250 million in its efforts to revamp its internal working model. The aim of this restructuring campaign is to add “agility” and decrease the internal silos which have slowed the organization down, according to Thomson Reuters.
However, the organization further added that the restructuring won’t affect the number of people its Newsroom contains. The financial costs of this initiative would have to be absorbed by only two units of Thomson Reuters, namely financial and risk, and the enterprise, technology and operations group, the latter of which was created in January.
There are nearly 48000 employees of the firm globally in 39 countries, who now aims to provide further mobility to its huge operational base of more than 160 locations. Thomson Reuters, whose main competitors include Bloomberg, stated that these steps are in no way a retaliation to any market condition or because of ensuing economic conditions.
Owing to these initiatives, the company also lowered down its expectations from operating profit gains to 16% from 18.4%. The overall growth expectations have remained the same at 3% from the internal sources of the company. The third quarterly net earnings dipped a bit from the previous year going down to $286 million from $293 million.
The organization has also added that the subsequent savings that will ensure from cash in 2017 would have to be of the same magnitude, similar to the costs which have been incurred owing to the restructuring efforts to provide a cushion for their activities, while any additional cash accumulations would be re-invested back into the business.
“We are taking these actions now because we see a real opportunity to break down internal silos, position ourselves closer to customers and become more agile,” said CEO Jim Smith in a memo which was emailed to employees on Tuesday as the company also posted its quarterly report.
The shares were up to $41.25, after experiencing a 4.7% increase in the trading session on Early Tuesday for Thomson Reuters.