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Loss of knowledge, loss of trust

Any organisation that has survived for more than a century and a half accumulates a rich fund of institutional knowledge to be passed on to new recruits, who in turn add to it in succeeding years. That is how reputation is earned, cherished and enhanced. It can never be taken for granted and must always be protected against unwitting erosion, willful attack or pernicious neglect.

At Reuters, long before it had celebrated its first century, that reputation was recognised as such a precious asset that those in charge of running the company devised a code of ethics to safeguard it when it was threatened at a time of global conflict. Government interests had tried to enlist Reuters as a weapon for wartime propaganda by one state against another. Hence the Trust Principles, a set of standards for corporate behaviour that had the immediate effect of thwarting any government interference and establishing a protocol that would endure unchallenged for the better part of the next half century.

Was it the Principles alone that helped create an esprit that made everyone who joined Reuters proud to be associated with what they firmly believed to be world’s finest exemplar of media integrity? Hardly. But they did help to make it a special place, one where legends of technical innovation and imaginative marketing were as valued as journalistic scoops. They were all part of the Reuters story. As more than one analyst noted, there was an incredible energy in the company. It had a buzz.

That energy was translated into exponential growth, making the company an attractive target for take-over, which is what happened in 2008. When they were tested, the Trust Principles proved no hindrance to acquisition despite what everyone had assumed was the unassailable bulwark of the first of the five Principles: “That Reuters shall at no time pass into the hands of any one interest, group or faction.”

As has recently become all too apparent, those charged with guardianship of the Trust Principles judged that the longer-term survival of the organisation - through take-over - trumped independence.

When they were tested, the Trust Principles proved no hindrance to acquisition

If, as Uffe Ellemann-Jensen, head of the Thomson Reuters trustees, told The Baron recently [Principles and power: an inquiry], Reuters would have gone “down the drain” if Thomson had not rescued it, then the primary question of survival cannot be gainsaid.

The Trustees chairman said the Principles - and the power of the Founders Share - would be invoked to prevent the Thomson family from selling Reuters editorial or if they diluted their controlling shareholding in the overall business from the present 55 per cent to below 35 per cent, but this must be seen as an empty threat. They did not block the sale the last time. Why would they do so in future?

Now, as the editorial department once again is put through the torment of redundancies, some see reputational risk. Although the layoffs are not very large in number in global terms, they cut deep into the editorial structure affecting, as they do, many of those who have been with the organisation long enough to become part of the ongoing process of sustaining the reputation for editorial excellence. With the departure, willing or otherwise, of so many talented people goes the knowledge of how things are done in ways that enhance the corporate reputation.

From all that is heard, morale has taken a beating. “I’ve never seen a more depressing, dispiriting, demoralised newsroom as Washington,” one long-serving journalist told The Baron. “There’s a disconnect between the senior editors who joined in the last two or three years and the veteran, hands-on correspondents and desk editors. The senior editors come out of their offices to talk to one another and seem to avoid people in the newsroom before scurrying back. It’s disgusting.”

Voluntary buyout offers have gone to 96 members of The Newspaper Guild of New York, the union that represents about 400 Reuters people in the United States. Nearly half work in Washington and more than one third are in New York. They were all long-serving staffers in text, pictures and video hired before 1996. The number of non-unionised staff affected is not known.

“They’re the ones with the institutional knowledge, not only about their work, but about the company, where they’ve put in an average of 25.5 years. They know how things used to be. They can put the present into perspective. They’re part of a natural mix of young and old, rookie and veteran,” said Peter Szekely, who worked for Reuters as a reporter, mostly in Washington, for 25 years.

Alongside the departures from Washington, the Americas desk located there is moving back to New York. “They’ve ripped the heart out of the bureau,” the journalist said. “The situation in New York isn’t much better.” A former senior executive who keeps in touch with colleagues at 3 Times Square said: “I was told the mood is awful.”

In London, about 40 people - many more than managers expected - are said to have applied for voluntary redundancy and 25 of them have been accepted. 

In Asia, nine redundancies are known across the region.

“Management hasn’t said much about what it hopes the buyout will accomplish,” said Szekely, now a full-time union official as secretary-treasurer of the Guild. “If no one takes it, we’re told there won’t be forced layoffs, and if all 96 raise their hands, get ready for a giant sucking sound as 2,400 collective years of Reuters experience head for the door.”

The passage of some of the most senior departing journalists - who include at least one global editor and others with 20, 30, even 40 or more years at Reuters - is being eased by a voluntary retirement scheme that includes tempting financial packages.

Exit can be brutally swift. As well as those leaving voluntarily, disciplinary measures are being used to try to force out others.

Inevitably this will accelerate the generational shift and exacerbate the loss of company knowledge.

After a similar large-scale buyout exercise in 1997, it took the Washington bureau years to recover the journalistic quality it lost, even though all of the departed veterans were quickly replaced, according to Szekely, who himself survived the cull.

“As a workplace, the bureau never regained its former rhythm and harmony, at least not by the time I left in 2007,” he said. “We learned later that at least some managers responsible for the buyout wished that they’d been more careful about what they wished for. But that, of course, won’t stop the current regime from making the same mistake.” ■