'Relentless' cost-cutting in downturn

In a memo to staff yesterday, Devin Wenig, markets division CEO, laid out an austerity plan to help get the company through the deep and unprecedented malaise gripping the banking industry, The Daily Mail said.

The website Paid Content quoted him as saying: “Many of our big customers are struggling and there is talk of a global recession. We are in a period of unprecedented change that seems to be unfolding in real time... The changes we are witnessing are global and deep and this is very different to a cyclical downturn.”

Wenig admitted the group’s top 25 large accounts are under pressure and said: “The short-term tactical response to this tough market is that we will be relentless about costs, efficiency and challenging the status quo. I don’t apologise for that; every dollar we can drive out of things like travel, entertainment, research that no-one reads, information requests that are not critical and meetings that don’t need to happen, is another dollar we can invest in the critical sales, product, news or service initiatives that will really drive this firm forward.”

Paid Content said a Thomson Reuters spokesperson refuted reports of a coming wave of redundancies. The Mail said Wenig had vowed to accelerate the group’s efforts to strip out costs and slash headcount, crystallising fears that the financial news and data division, which accounts for 60 per cent of group profits, will suffer as banks across the globe shed staff.

“As staff levels plunge at banks, so, too, will demand for Reuters’ news and data terminals,” the Mail said.

“Wenig said he would step up a programme designed to squeeze over £700m in costs out of the combined group by 2011.

“He also signalled that job cuts were creeping up his agenda.

“Wenig told staff: ‘We will be relentless about costs and efficiencies and restrictions on headcount will be followed to the letter’,” the Mail said.

But Paid Content said there were no new numbers in the memo: “just a reminder that Wenig & Co. are taking no prisoners when it comes to cost saving in uncertain times...”

It was not all bad news, however. Wenig said it was an absolute certainty that global economies will recover and that a growing global class of wealthy people would still need financial information and advice.

“The environment may be deteriorating, but we have had several strong sales months and I believe we are winning share,” he added. ■