Reuters retrenchment: retreat from the digital front line or back to basics?
Friday 21 November 2014
Limiting story lengths, dropping stand-alone opinion pieces, shifting video resources, closing financial chat rooms, terminating products and services that don’t make enough money, and now, almost inevitably, imposing more editorial lay-offs - it all sounds like the end of Reuters’ flirtation with bright and shiny web offerings.
Three years ago, the editorial management headed by new editor-in-chief Stephen Adler began a spending spree on big-name, big-salary hires from US media old and new. Writers with established marquee recognition in the United States added lustre to Reuters’ brand image as it sought to achieve success where consecutive managements had failed over many decades - take on American financial, political and general news rivals on their home turf and make it big in the USA.
Now the majority owners of Reuters’ parent Thomson Reuters appear to have decided enough is enough and there’s going to be less money to spend. Belts are being tightened.
Adler said the 2015 editorial budget would probably be about one per cent larger than this year’s and would be “big enough to maintain our standing as the world’s largest independent news organization and to pay for a year’s worth of outstanding journalism.” Ominously, he added: “It’s not big enough, however, both to cover inflation and to fund the growth initiatives that are vital to our future success”.
Customer needs and market conditions are changing - “dizzyingly fast” Adler said - and resources are being re-assigned to areas where Reuters sees promising growth opportunities.
He did not disclose how many jobs would go and a Reuters spokesman referred only to “a slight decline in overall staffing”. A Thomson Reuters spokesman told The Baron the company did not intend to release any figures at this time. The redundancies do not affect Thomson Reuters employees outside of Reuters, the spokesman added.
But “a person familiar with the matter” told US blog BuzzFeed the cuts on the editorial side of the business would not exceed 55. BuzzFeed said it had a copy of an October draft of a cost-cutting plan that said 111 positions would be eliminated. Either figure, if confirmed, would be much smaller than the editorial lay-offs a year ago.
The job cuts announcement appeared to The Washington Post to be among “the final gasps” of a Web strategy that it said had begun with great optimism. In April 2011, Reuters executive Chrystia Freeland became editor of Reuters Digital and began a campaign of aggressive, free-spending expansion by signing up high profile columnists for a Reuters Opinion operation. Many of them had reputations already established in US media but some of their opinions fitted uneasily with a traditional wire service proud of its reputation for impartiality. Worse, there were egregious errors that raised questions about editorial control over so many people new to Reuters and their adherence to the Trust Principles.
Freeland’s digital vision was never fully implemented and she resigned suddenly in July 2013 to run for a seat in the Canadian parliament, to which she was subsequently elected.
Another of her projects - a costly web venture called Reuters Next - was shut down soon after Andrew Rashbass joined from The Economist last year as Reuters chief executive. The reasons were that the intended next-generation web presence was a long way from achieving either commercial viability or strategic success. The existing suite of Reuters.com sites was a better starting point for where Reuters needed to go, he decided.
Pulling the plug on Reuters Next brought about a great number of departures from Reuters and, to the Post, raised questions about where the organisation was headed digitally. It added: “Despite all its scoops on business and finance, it has had trouble figuring out how to adapt key business products - subscriptions and financial information terminals - to the digital age.”
Reuters Insider TV has failed to achieve enough revenue to justify the editorial expense of creating original financial video. Most in-house production of Insider videos will cease by the end of the year, to be replaced primarily by partners providing this service to financial customers. Alongside this retrenchment, investment in Reuters TV, a mobile, on-demand subscription news video service for consumers, continues apace and staffing is being increased in readiness for a projected launch in January.
More editorial jobs are destined to be exported or outsourced, removing more headcount costs from the balance sheet. Reuters’ big offshore operation in Gdynia, Poland where it employs about 1,000 people will be developed as a centre of excellence for English-language coverage of European companies, just as a similar operation in Bangalore, India reports largely on American companies.
Whether the changes, forced as they are by budgetary constraints rather than news market judgments, will signal a retreat from digital media or a return to fundamentals of wire agency journalism remains to be seen. ■