Has the penny finally dropped at Reuters?

When Alessandra Galloni was appointed as Reuters editor-in-chief in April, The Baron asked whether she would bring real change or more of the same.

Her announcement of new leadership appointments last month suggests that scepticism about her ability to bring desperately needed change may have been premature, although the impact of her moves should not be exaggerated. The penny has dropped, but maybe not far enough yet.

Galloni announced two new senior editors to spearhead news gathering: Tiffany Wu, who will be in charge of business news, and Mark Bendeich, who will head the politics, economics and world news operation.

These appointments are significant on several different levels.

Firstly, they indicate that Galloni is not in thrall to the man who brought her to Reuters, enterprise editor Michael Williams, as The Baron had feared. Williams has been the prime mover in changing the focus of Reuters towards long form, lavishly produced magazine-style journalism, diluting its ability to produce fast breaking news.

Secondly, both Bendeich and Wu are highly experienced and respected survivors from the era before Reuters was taken over by Thomson, who imported a management group almost entirely drawn from The Wall Street Journal including former editor-in-chief Stephen Adler, Williams and later Galloni herself.

In announcing the appointments, Galloni made it clear, as she had soon after she took over, that Reuters must return to focusing on market-moving news for the financial clients who pay the bills - headed by Refinitiv.

Galloni’s announcement brought criticism from former Reuters journalists who said it was nothing new, merely reviving the age-old central credo of Reuters, i.e., being first with reliable, unbiased news.

But this is surely the point. Galloni seems, despite her links to The Wall Street Journal regime under Adler, to have realised that a decade of erosion of Reuters USP must be reversed.

In doing so she seems to be responding to heavy pressure from Refinitiv, which accounts for half of Reuters revenue, and howls of frustration from Reuters correspondents at the diversion of staff and money into long-winded investigative journalism that has won a clutch of Pulitzers but produces little revenue.

Galloni, who started her career at Reuters, is therefore to be applauded, but there should be no doubt about the mountain that Reuters has to climb to reverse its decline.

In the last decade, Reuters has steadily lost ground to Bloomberg, its main rival in financial markets, and there have been some spectacular timings failures. The frustration was apparent at Refinitiv, the former financial and risk division of Thomson Reuters, now owned by the London Stock Exchange.

In June, the respected French newspaper Le Monde wrote a critical take-out on Reuters saying serious gaps had opened in its coverage because of constant cost cutting, which was causing severe morale problems.

Such is the erosion of Reuters core skill set that “Speed Weeks” have been held to teach staff how to produce news at lightning speed, something which had been in the agency’s DNA since its foundation 170 years ago.

Reuters deskers say the quality of incoming copy has declined disastrously, because bureau chiefs in some areas are either too hard-pressed with inadequate staffing levels, or insufficiently experienced to ensure clean incoming stories.

There has been a steady haemorrhaging of senior correspondents and talented juniors around the globe, including Europe and areas of former great strength, like Africa. Some complain of “unbearable pressure” to simultaneously produce both fast breaking news and enterprise stories in under-staffed bureaux, after years of cuts.

To address the problems of quality and speed, Reuters is engaged in the creation of news hubs around the world, linked virtually, where skilled speed merchants and more senior journalists will hone and file copy from reporters - something that Bloomberg already does. This is intended to split bureaux into breaking news and initiative teams with reporters freed up to produce more exclusives.

But except in certain areas, like the offshore filing centres in India and Poland, these changes have so far not been accompanied by a major staffing boost, Reuters insiders say. “They are just robbing Peter to pay Paul,” said one senior source. A correspondent in the field told The Baron: “It is just a sticking plaster that covers up the loss of staff, especially experienced correspondents.”

Nevertheless, Reuters sources say the news service has started to receive more positive feedback from Refinitiv, where a greater emphasis on breaking news with more exclusives and wins against Bloomberg has been noticed. “Things have begun to steady,” one said. “But there are still many gaps where Bloomberg has the edge. It’s early days”.

The degree of change should not be overstated. Many of the old leadership from WSJ veterans is still in place and Simon Robinson, a close associate of Williams, is Galloni’s deputy. He will fill a broad role managing production desks. Robinson was a rival candidate for the editor-in-chief job and was widely expected by staff to take over Galloni’s previous role, before she split it between Wu and Bendeich.

Some critics say Galloni has merely moved around the chairs at the top table rather than bringing in new blood. They also note that at a time of cost cuts that have dangerously reduced staffing levels, the organisation remains alarmingly top heavy with a hefty executive pay bill. Galloni says more executive roles are in the pipeline.

Real change at Reuters would require a broader refocussing on breaking news at the expense of enterprise. This might be a step too far for Galloni, even though Bloomberg has radically reduced its long-form reporting.

Hard pressed correspondents and deskers find it frustrating to see very long special reports that take months to produce, while they struggle to find the staff to cover breaking news.

“I wish they would do a special report about the Enterprise unit with statistics on who reads its stories,” one disgruntled journalist said.

Meanwhile, in a sudden announcement this week, Michael Friedenberg, the president of Reuters and Galloni’s boss, announced he is leaving the company in December.

Insiders believe he is carrying the can for a fiasco earlier this year when Reuters had to suspend the launch of a paywall on its website a few days before it was due because Refinitiv threatened legal action.

Refinitiv said the move broke the terms of an agreement under which it pays the news agency $325 million a year for its output and would effectively poach Refinitiv clients.

Insiders say Adler recruited Friedenberg to be his own boss, in a strange arrangement in which Friedenberg had no say in how Reuters would allocate its resources. It seems unlikely that his replacement would swallow the same deal. That might mean Galloni would be more constrained than Adler in allocating coverage resources. ■