Reuters cuts around 5% across editorial

The cuts will be broadly distributed across the globe and at all levels of the news agency, including managers, Adler said during a question and answer period dominated by questions from the Washington newsroom.

Adler would not give details of the cuts or where they would fall. They still have to be finalised and discussed with unions and work councils. But redundancy notifications will be done mostly this month.

Some people will be given the chance to transfer to other jobs within the company if they have the necessary background or talents. The others will get departure packages. Some may take voluntary departure, and they will also get packages.

“It’s starting quickly and will move as fast as it can,” he said. “People should never make light of it and it’s really significant in people’s lives,” he said, noting that the goal is to get on the other side of the staff cuts.

Adler also said that there will be an investment in expanding into emerging markets – he mentioned sub-Saharan Africa, South East Asia and parts of Latin America where companies are attracting outside investment – and that despite cancelling Reuters Next, the consumer-facing website that had been in the works for more than two years, there is still a commitment to the existing website reuters.com. Adler called improving the website an act of priority and said it is by no means on the back burner.

Staff morale has been hit by cancellation of Reuters Next, announced by Reuters’ new chief executive Andrew Rashbass last month.

PRÉCIS

Following is an edited précis of Reuters president and editor-in-chief Stephen Adler’s remarks to staff:

It’s been an extraordinary period for news. There have been too many fine stories to mention specifically... 

Today I want to speak about our upcoming plans. I want to be upfront with you. There are a lot of really positive things we’ll be doing, and this company wlll be a more exciting place for journalists. There will be some small staff reductions. But I want to acknowledge that we know that cuts are always painful. As a background to these changes, you should know that there is some very constructive stuff going on.

Let me be clear about our editorial mission. We want to be and stay the greatest news organisation in the world. Over the past few years we have followed a two-track  strategy, delivering fast, accurate and neutral news and on the other hand building greater capacity and commentary as value added…to help customers come up with investment ideas. We need to be different when a lot of news is becoming commoditised. We have to provide another reason why people have to subscribe to Reuters. The two tracks are essential, and they are supported by the sharper file initiative. This means fewer marginal stories and fewer unnecessary updates. We’ve made a lot of progress on sharper file.

We have to consider how much news is changing around us. The global economy is not the same as it was two years ago. We need to respond to the changes and anticipate where the world is going and get in front of it and get on top of it.

There are shifts in the global economy, from west to east and from north to south and we have to make sure our coverage is moving along with it. We need to make sure we are on top of the technologies of distribution.

User behaviour has changed dramatically in the last two years. It has become much more mobile and digital, and tablets are being used the way no one anticipated four or five years ago. Also in video. There are lots of new competitors. The barriers used to be high but not anymore. We also see an increase in government-sponsored journalism. This has a government information impulse but they’re doing some strong journalism and are our competitors as well. As for citizen journalism, we have to look at how that effects us and how social media affects us.

When you think about all those changes, you have to make sure you have the right people, the appropriate people with the right tools. We have to make sure we are covering the right beats and not the beats that we have always covered because that’s what we did. To adapt is really exciting for journalists. There are lots of new skills to learn. There are new beats that we’re going to have to master. There will be some assignments in emerging markets where we’ll be strengthening coverage. But we have to reduce staff and costs in some areas. There will be cuts. Some people will be given the opportunity to transfer to jobs elsewhere in the company. Those people who are leaving will be eligible for severance packages. And there will be packages for voluntary departures.

What’s the scope of the cuts? We will end up with editorial staff slightly smaller, less than five per cent smaller. But it will be more strategically set up to help us do the job better. One thing we want to focus on is expanding coverage of emerging markets. It seems to me, given how important regulation has become, we need to be covering regulations around the world. Also technology. I want to make sure we cover technology and regulation as well as we can. We need to be all over that. We need to do more automation. That will help us maintain our speed advantage and free up journalists for more complex work. We’re going to double down on automation.

For some time we have had a team of 15 or 20 people working on how we should be looking at social media. How should we be distributing to social media, how to adapt to it. We care enormously about accuracy. But there’s no doubt that we have to embrace it while thinking about how to deal with social media.

Next thing we’ll put emphasis on is news delivery. There has been enormous progress in recents years. But we’re going to put more emphasis on combining text and graphics and videos so that customers get access to the wonderful work you do.

We have revised our training programme. I’ve seen that. It leverages more of the capabilities of our staff. It brings in player-coaches, people on desks working in hybrid roles, making sure we have more mentors and sponsors, more leadership positions. Some of that will be in e-training. I believe that all of these initiatives will help us be more successful. You can’t stand still when the world is changing. It’ll be a more exciting and fulfilling place to be a journalist.

QUESTIONS & ANSWERS

On the chopping of the Reuters Next programme.

There is commitment to a strong .com presence. What happened was we looked at where we were and just felt, given operational issues, cost overruns and the fact that it had taken longer than anticipated, and decided that it would better use of funds to go back to old platforms and make them work better.

How will the cuts be implemented geographically and will they affect managers as well as ordinary journalists?

It is complicated. Consultations have to take place with unions and work councils. I can’t give lot of detail. They will not all be at the bottom, but across the world and across the board. We are looking at where we have the most needs, where we want to move to, at capabilities. We aim to end up with a staff that will be more effective in the environment we are working in. We wouldn’t ordinarily publicly reveal details anyway. It’s around the world and certainly not all at the bottom.

Which areas will staffing be increased in and where will it be cut?

The problem with that as it will lead to people speculating about which people are vulnerable. I’m excited to talk about new areas. Obviously that will emerge as shape of new org takes place. I don’t want to talk about specifics because then it could cause speculation about which jobs are vulnerable. I can’t go there right now. We still have to talk to human resources, to unions and staff councils.

What is the time frame for the cuts – three to six months?

The aspiration is to notify pretty much everyone by the end of this month. I hope this will be quick, though in some cases it will take a few months. We want to get on to the next stage. We want to do it as quickly as we can.

Again, can you be more precise on where the cuts will fall?

They will be broadly distributed around the world, and be based on where the needs are going to be. There’s going to be additional staffing in emerging markets and in places where there is a lot of business interest and where our staffing doesn’t seem to be sufficient. Again, I know you don’t expect me to talk about what numbers will be cut in which places.

In the Americas, there are heavy layers of managers in editorial, sometimes one manager with one person reporting to him. Is there any thought of reducing managerial numbers?

I’m not going to speak specifically on that. In journalism organisations, there’s a fuzzy line between managers and reporters. Sometimes people called managers are doing a ton of reporting themselves. Those numbers will vary more in different news organisations. We are looking closely at whether we have too many layers. Primarily we’re looking at where we have needs. There could be managerial cuts.

Who decides what gets cut where?

The process involves managers at the more senior level working with regional editors to come up with the appropriate lists. We are doing this the most appropriate way we can. There are obviously constraints with union and works council rules. I personally don’t sit here and say it should be this person or that person. It’s not arbitrary. We try to do it as carefully and as rationally as possible.

In Washington, there are quite a few people who have left leaving posts empty, like trade reporter. Will these posts be filled?

Not necessarily. The goal is that we need to be covered where we need to be covered. Reporters covering how we interact with government are very important. We can fill positions if they are necessary positions.

Who in management will decide which managers will go?

It does bubble up to the most senior managers, it does bubble up to me. My senior team looks across the field at what positions we absolutely need and those we don’t. This is the nature of organisations like ours. The ultimate decision is mine. 

Is it all a matter of keeping within a budget?

You raised the question of profitability. That is important. For us it’s important for sustainability. If you look at Reuters News, you want to be sure you’re delivering recognisable benefit to the company. We want to increase the emphasis on organic innovation and growth. We want to take on projects like social media. We will need more resources for that. And that is what we need profitability for. Yes, we do have a budget, the same as in any company. But it does feel painful to make what are relatively small cuts to fuel the investment in other things.

You have to look across our industry. There are very few news organisations in the world like this. You’ve seen constant retrenchment and cuts. We have a much more sustainable model and we want to make sure we stay profitable and sustainable.

[Reuters] Next may not have been the right thing to do. I know the new CEO, Andrew [Rashbass], has higher priorities. He makes good points about our advantages in multiple language services to be able to send this extraordinary file, this massive and brilliant file, out to people in their own languages. I see more emphasis on local language sites and making sure they are strategic, on providing them with the technologies to make sure they are effective.

On domestic language staff, I think as with everything we do we need to look at the journalistic need locally. The local language services will get the appropriate support. But what are the needs of the local markets? Sometimes they are very specific. They are sometimes asking for lots of volume, specific types of news, coverage of mid-caps. That stretches our ability. The balance is going to be different depending on that customer base. I hope we can provide training for the people on these services.

Are the problems with Eikon being overcome? Are there any plans to improve Editorial technology?

I  think Eikon is dramatically improved. It is one of great success stories over the last year and half. They’ve done an absolutely brilliant job. You look at where Eikon was a year ago, and it’s now on mobile. I use the mobile app more. It’s a fantastic way to get news and be on top of the markets. Most customers are finding it superior to brand x. Each week way more people come onto it than we anticipated. It’s really exciting. We’re working closely with their team to improve news delivery. It’s only going to get better. We do have issues within our own offices. It’s something our team is constantly working on. We’re all working hard on it. Computers are being upgraded bureau by bureau, region by region.

What is the time frame for the job cuts?

It will largely be done this month and individual cases as long as they take. The goal is to do these things quickly. But there are rules in place that we understand and in some cases that takes some time. It’s starting quickly and it’ll move as fast as it appropriately can. Unfortunately, I’ve been in this situation before. It’s never easy. No one should make light of this. You want to get on the other side of it when you can, to think we’re positioning ourselves to be in better shape than we were.

Is there any more to come for editorial?

What I’m telling you for editorial is all of our plans. These are our plans. There’s not another shoe dropping on this. I’m telling you the full extent of the plan. There are things that we need to do. We are operating in an environment in which we need to make sure we’re doing things efficiently, keeping up with changes, and serving our customers as effectively as possible. In a news organisation, we need to respond and we need to move towards areas that we’re not covering enough. We need to be in social media.

How will job cuts put us in better shape when competition like Bloomberg is boosting the size of its bureaux?

Cost is a factor, but it’s not the only factor. What we’re trying to do is make sure we hit our budget and that we’re investing in the things we need to invest in. Hitting our budget is important, even to beat our numbers so as to finance things that are really important for Reuters News. I don’t want to shy away from profitability. It is not a question of squeezing every ounce out. Moves like this will make us really sustainable over time.

How are we doing against the opposition?

We do a lot of research on this. Head to head against any competitor, our customers think we do better work. They see us as more reliable, faster, more accurate, and neutral. I hear that everywhere. Yes, there are some instances where we might have been beaten. But customers say they love Reuters News. I look at timings and we’re doing very well. When we see a problem we address it. Frankly, we do better than competitors on timings. We did an intensive study and we ranked number one on speed, neutrality, usefulness to customers. I know from inside that it’s painful when we’re understaffed. We actually do very well. These moves are intended to make us better. It’s the same with sharper file. Can we take those resources and time and put them to more effective use. We’re still likely to have the largest independent news organisation in the world even after these changes.

Are we trying to target a financial audience or a wide consumer audience?

I don’t see any change. Just looking from the practical point of view, we make the majority of our money from the financial audience. That’s an audience where they need fast, accurate and neutral news. That’s not changing. The News Agency is our second most lucrative area. There are 22,000 news organisations that pay us for our news and we reach millions around the world. That’s extremely valuable. The consumer business is tiny. You don’t want to throw away revenue. It is good that we can speak directly to consumers, for acquiring and keeping talent that’s really important. It’s good for the brand to be out there, because we do excellent work and we think we can derive more revenue out of it. I don’t see the balance shifting among the three areas.

Where will the cuts fall?

Across the world and geared towards where we need more people and where we need fewer. I do wish people would take a step back. We are maintaining strong staff levels, we’re not making a double digit cut. Companies all around the world are looking at costs, there are a lot of cost pressures. We’re doing it in the context of being effective and trying to make the number as modest as we can while doing the job we need to do. The notifications will be coming soon and will be done over the course of this month.

Compare Thomson Reuters to The New York Times.

We’re a different business. They’re getting most of their revenues from advertisements and subscriptions. We’re getting most of our revenue by bundling news into financial products. That’s a really good financial model. People with a less good profit model may have to rely more on consumer digital. We want it to grow but it’s going to be a small part of our business. It is complicated. Consultations have to take place with unions and work councils. I can’t give a lot of detail. They will not all be at the bottom, but across the world and across the board. We are looking at where we have the most needs, where we want to move to, at capabilities. We aim to end up with a staff that will be more effective in the environment we are working in. We wouldn’t ordinarily publicly reveal details anyway. It’s around the world and certainly not all at the bottom.

What emerging markets will we be moving into, in what regions?

There is clearly a lot of interest in sub-Saharan Africa. China is investing there in a big way, and so are other people. There’s a lot of interest in Africa rising and we think this is a next great area of growth, as we look at what we need to do to be effective. There is a lot of growth in South East Asia, and in Latin America there are a growing number of companies attracting investment. We want to look at areas where we are understaffed and where there is a lot of interest. Where precisely will become clearer as we go forward. There is definite interest in places where people are investing. Incidentally, our competitors are looking at these regions as well and it’s important for us to be on top of that. Sometimes we joke that the US is an emerging market for us. The US is important because it is the largest economy in world, and because it’s an important financial centre it is important for us. Obviously the news that happens here is important for rest of the world.

Are we trying to target a financial audience or a wide consumer audience?

I don’t see any change. Just looking from the practical point of view, we make the majority of our money from the financial audience. That’s an audience where they need fast, accurate and neutral news. That’s not changing. The news agency is our second most lucrative area. There are 22,000 news organisations that pay us for our news and we reach millions around the world. That’s extremely valuable. The consumer business is tiny. You don’t want to throw away revenue. It is good that we can speak directly to consumers, for acquiring and keeping talent that’s really important. It’s good for the brand to be out there, because we do excellent work and we think we can derive more revenue out of it. I don’t see the balance shifting among the three areas. ■