Thomson Reuters Corporation will cut its workforce by 12 per cent in the next two years, axing 3,200 jobs, as part of a plan to streamline the business and reduce costs.
The news and information provider, which completed the sale of a 55-per cent stake in its Financial & Risk (F&R) unit to private equity firm Blackstone Group LP, announced the cuts during an investor day in Toronto on Tuesday, reports Reuters.
The company also outlined its future strategy and growth plans in the announcement.
Currently, it is focusing on its legal and tax businesses following the Blackstone deal.
However, the corporation declined to say where the job cuts were being made.
Co-Chief Operating Officer Neil Masterson told investors that staff had already been informed about 90 per cent of the planned cuts.
Shares in Thomson Reuters rose as much as 3.7 per cent on Tuesday, hitting an all-time high.
“They laid out some good plans for the next couple of years,” said Edward Jones analyst Brittany Weissman.
“I think there is still a long road ahead, but it was positive. They explained in more detail the pathway to more organic growth.”
The company aims to grow annual sales by 3.5 per cent to 4.5 per cent by 2020, excluding the impact of any acquisitions.
Chief Executive Officer Jim Smith said it plans to cross-sell more products to existing customers and to attract new customers. The company will also cut the number of products it sells, he said.
“We’re going to simplify the company in every way that we can, working on sales effectiveness and on ways to make it easier both for our customers to do business with us and for our frontline troops to navigate inside the organisation,” he said.
As part of the streamlining, the company said it planned to reduce the number of offices around the world by 30 per cent to 133 locations by 2020.
Following the Blackstone deal, about 43 per cent of Thomson Reuters revenues come from its legal business, with 23 per cent of sales coming from corporate clients and 15 per cent of sales coming from its tax business.
Reuters News accounts for only 6 per cent of sales but Smith said it remained a key part of the business under Michael Friedenberg, who joined the company on Monday as president of its news and media operations.
“We believe he can make Reuters News an even greater part of our growth story going forward,” Smith said.
Thomson Reuters set a target to reduce its capital expenditure to between 7 per cent and 8 per cent of revenue in 2020 from 10 per cent currently.
The company has set aside $2 billion of the $17 billion proceeds from the Blackstone deal to make purchases to help grow its legal and tax businesses.
Shares in Thomson Reuters have risen by 40 per cent since May, benefiting from the company buying back $10 billion worth of shares.
